Inside new fight over UTL

Sunday June 23 2019

In the spotlight. A man walks past the UTL head

In the spotlight. A man walks past the UTL head offices in Kampala in 2017. The Finance ministry, led by State Minister for Planning Evelyne Anite, accuses the administrator of the company, Mr Bemanya Twebaze, of failing to provide accountability regarding the its operations. PHOTO BY MICHAEL KAKUMIRIZI.  

By MISAIRI THEMBO KAHUNGU, FRANKLIN DRAKU & ISABELA YVONNE MUGENI

The fallout between the administrator of Uganda Telecom Limited (UTL), Mr Bemanya Twebaze, and government officials, most notably State Minister for Finance (Investment) Evelyn Anite, has thrust the struggling company back in the limelight.
Ms Anite, citing a report by a select committee of Parliament, accuses Mr Bemanya of failing to provide accountability regarding the operations. She also accuses him of insubordination.

UTL was borne out of the unbundling of the former Uganda Posts and Telecommunications Corporation (UPTC), which also gave rise to Posta Uganda. The government then divested 69 per cent of UTL’s shares to the Libyan government under the late Muammar Gaddafi, retaining 31 per cent. The shares that the government retained were held by the Ministry of Finance on behalf of the government.

After the ouster of Gaddafi, the international freeze on Libyan government assets that followed and the departure of the Libyan directors, the government of Uganda reclaimed 100 per cent shares of UTL, vesting them with the Ministry of Finance, which made the ministry the supervisor of UTL.
UTL, before all the shares reverted to the government of Uganda, struggled financially as the Libyan government could no longer finance its operations. The Libyan directors, who were overseeing its operations, were also accused of taking money from the company.
By the time the government reclaimed full control of the company, UTL desperately needed an injection of cash to keep alive, with its liabilities standing at a whoping Shs700b.

After the withdrawal of the Libyan directors, UTL was put under receivership and Mr Bemanya, Uganda’s Registrar General and chief executive officer of the Uganda Registration Services Bureau, by law, took over the administration of the company, on behalf of the government.
UTL, for instance, owed government ministries, departments and agencies (MDAs) Shs200b, which it could not pay off. President Museveni, in a bid to keep the company alive, directed that the debt should not be collected but be converted into equity for the government. He also opened up MDAs to provide lucrative business for UTL.

War breaks out
It is assumed that UTL’s financial woes were eased by these measures, and the story went out to the public domain, even though the company remained meek in the market as its competitors, notably MTN and Airtel, jostled for more market share.
In recent weeks, however, the story has resurfaced, with Mr Bemanya being accused of failure to provide accountability and insubordination.
The public outburst against Mr Bemanya’s handling of affairs at UTL has been led by Ms Anite.
“This (UTL) is not Bemanya’s mother’s breast milk that he can suckle without any form of accountability. We will ask him to account because shareholders want to know how UTL is being managed. It is only a mother’s breast milk that cannot be accounted for,” Ms Anite told journalists on Friday.

On Thursday, Ms Anite told Parliament that the “government has lost control over UTL,” citing what she called lack of transparency as the stumbling block to her ministry’s efforts to check the books of accounts of the telecom company.
MPs had expressed concern over what they called lack of accountability at UTL since there were no audit reports since the company was placed under receivership in 2017.

The MPs led by Aringa South MP, Alioni Yorke Odria tabled documents indicating that Bemanya had blocked accountability audits in UTL and demanded that that his contract be terminated, or Speaker Rebecca Kadaga appoints a select committee to inquire into affairs at UTL. The Speaker, who promised to make consultations, is expected to give her ruling on the MP’s prayers on Tuesday afternoon.
President Museveni, who sources say has remained duly updated about developments regarding UTL, has now directed Attorney General William Byaruhanga to advise on how to proceed regarding the allegations levelled against Mr Bemanya.

L-R: Mr Bemanya Twebaze, Ms Evelyne Anite and

L-R: Mr Bemanya Twebaze, Ms Evelyne Anite and Mr William Byaruhanga

Asked about the directive on Saturday, Mr Byaruhanga told Sunday Monitor: “I have heard about it (presidential directive) but I am out of the country, on my way to China. You hear from me when I return on Thursday.”
Bemanya speaks out
In a press conference he called on Friday morning, Mr Bemanya gave what he called a status report on matters of UTL. He insisted that he had not blocked government officials from accessing UTL, saying it is not yet the right time for audits to be carried out on the company’s books of account.

Mr Bemanya, who said he has a good working relationship with the Ministry of Finance, also denied the allegations levelled against him in Parliament, including of running UTL without a two-way communication between him and his supervisors; failure to declare the profits; and plunging the company into debt.
“As administrator, I have not blocked any audit. However, I share the same view as the Auditor General that it is not the right time for an audit.”
When Sunday Monitor contacted Auditor General John Muwanga for a comment, he called Mr Bemanya’s claim rubbish, and explained: “When we went to audit UTL, those people told us there is nothing we could do because the thing [UTL] is in receivership yet I have the mandate to audit all government entities. I have asked the Attorney General to advise on the matter.”

Mr Bemanya said at the time they took over, UTL had last been audited in 2013, adding that final audit will be done on November 22 when his tenure as administrator comes to an end.
He insisted that he has been filing bi-annual reports detailing the incomes coming into UTL, adding that that the minister and the MPs were peddling lies about the operations of the telecom company just because they have a hidden vendetta against him.
He said he has complied with all the legal requirements, adding that there are several correspondences with officials in the Finance ministry.

“We have had several cordial engagements with Ministry of Finance and the most recent meeting was called on Wednesday, June 19, where these issues were discussed. A subsequent meeting was yesterday (Thursday) between Ministry of Finance and the Auditor General where I am informed it was agreed that the Attorney General provides legal position in writing,” he said.
Releasing the ‘status report’ during a press conference prompted Ms Anite to fire back at Mr Bemanya, accusing him of continuing to be insubordinate to the Ministry and the regulator- Uganda Communications Commission (UCC), which she claimed he last accounted to in November 2017.

“When money reaches people’s heads, they forget where they came from and I need to tell you the Head of State (President Museveni) has taken note of this matter. We are the ones who put him (Bemanya) in that office, we have consulted the Attorney General and I can assure you, we are going to deal with lack of transparency,” Ms Anite charged.
The minister said she was “excited” to see a copy of the ‘status report’ of UTL that Mr Bemanya released to the media, but insisted a formal accountability has to be made through proper government channels using an audit into the books of accounts.

She said if Mr Bemanya continues to defy the demand for accountability, like she says he did in respect to the request for audits directed by Finance Minister Matia Kasaija and herself, government will find a way of accessing the books of accounts.
“When is the time prudent for Ugandans to know what is happening in UTL? The iron wall that he has put at UTL, we shall go there and pull it down. All I want is UTL for Uganda and for Ugandans,” Ms Anite said.
This newspaper has learnt that UTL was earning Shs4.1b monthly at the time the Libyans, who had 69 per cent of shares, left.



Speaker Rebecca Kadaga

Speaker Rebecca Kadaga

Turn in revenue
Six months into Mr Bemanya’s tenure, it was said that the company had hit a monthly revenue increment of 5 per cent, earning Shs4.5b.
This is the time when Cabinet directed that all government Ministries, Departments and Agencies (MDAs) must sign up to accessing internet services from UTL so that the company generates more money to be attractive to potential investors. This directive sparked off a verbal war between the National Information Technology Authority (NITA-U) and UTL managers backed by Finance Ministry officials.
The government in that regard ordered NITA-U to surrender the National Backbone Infrastructure (NBI) project to UTL to enable easy access to the Internet for the rest of the country. Government ministries, departments and agencies (MDA), therefore, now pay UTL for Internet services.

However, with now 350 MDAs signed up to UTL as a sole provider of Internet services which they pay for, issues of accountability for the profits that MPs allege to be around Shs15b monthly, remained unclear.
Mr Bemanya said on Friday that such allegations against UTL will only hamper his efforts to find a potential investor to take over the company before his provisional administration tenure ends in November.

In October 2018, the government hit a dead end in handing UTL to Teleology Holdings Limited, a Nigerian company, that failed to pay Shs268b in three months to takeover full control of the company.
Cabinet chaired by President Museveni had ordered that any failure by the Nigeria company to fulfill the financial obligation would prompt the government to cancel the offer and scout another buyer for UTL, which plunged into the red due to mismanagement, high debt portfolio and dwindling subscriber base.

Now, Mr Bemanya says the hunt for another investor is on, adding that he is already holding discussions with other strategic investors with hopes to strike a better deal soon.
“We are yet to be successful with any of the companies. Specifically, Teleology Holdings Limited reached the stage of being given an offer that lapsed because they failed to meet the conditions of the offer. The company is still available for strategic a investor and we continue with the engagements,” he said.

Pensioners speaker out
Meanwhile, more than 1,000 pensioners of the Uganda Posta and Telecommunications Company (UPTC), which was privatised to give birth to private companies, including UTL, have petitioned the Speaker of Parliament over failure by the company to pay their pension arrears and putting them on a monthly pension despite a court ruling to the effect.
They have also accused Mr Bemanya of arrogance, a claim he denies.
Some of the pensioners led by Mr Besweri Watwalima, were also at the Finance ministry on Friday, where they delivered a copy of a petition to Ms Anite, whom they told they were happy for her submission of their issues on the floor of Parliament on Thursday.
Without mentioning how much they demand from UTL, the pensioners held that the administrator has not given them a listening ear despite having trounced the company in a legal suit to the level of Court of Appeal.

Mr Watwalima asked government to sack all officials in UTL who have frustrated their demand for payment of pension arrears.
“We are now saying that whomever is concerned with the official receiver of UTL (Administrator) raises up and pushes this man out of the way because he is untouchable and does not listen to old men like ourselves,” he said.
In their petition, the pensioners claim they have lived miserable lives for the last 16 years since they were retired from the company without a package by their employers.

Shs410b fake claims
Inherited debt. Mr Bemanya said out of the Shs940b claims his team inherited, Shs410 was discovered to be fake claims, which he blocked.
He said the team unearthed the saga after careful audit, adding that some of the initial claimants shied away from the process of verification.
“After rigorous exercise, the verified figures stand at Shs530b. Some of the creditors shied away from verifying their claims and others were found to be fictitious,” he said.

editorial@ug.nationmedia.com

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