How will Uganda Airlines rise above the current management woes? 

Uganda Airlines Bombardier aircraft soon after they were delivered at Entebbe airport in 2019. PHOTO | FILE

What you need to know:

  • Insiders say the fights have seen the ministry of Works officials face off with the office of the Attorney General and other struggles that have pitted the board of directors against the management, managers against each other, the ministry against the board and the management against a media consultancy firm, Abbavater Group, writes Isaac Mufumba.

On Wednesday, shareholders of Uganda Airlines moved to draw a line under the seven months investigation into allegations of corruption and abuse of office that had been brought up against the suspended board of directors of the airlines, headed by Mr Pereza Ahabwe.

“The shareholders have concluded their investigations and inquiries into allegations made against you and the board generally and found no evidence to merit any sanctions,” read the January 19 letter written by the airlines’ company secretary, Ms Kyomuhendo Bisereko.

Capt Edward Francis Babu, a retired Uganda Airlines pilot with interests in the aviation industry, has always maintained that President Museveni’s decision to direct the suspension of airlines’ management team and the board was based on misinformation.

“Some people must have lied to the President yet they are part of the investigation! They should not be anywhere near any form of investigation because they are interested parties. They should be asked to leave. Even in court, a judge who has a conflict of interest is asked to step aside,” Capt Babu told Sunday Monitor in a previous interview.

On May 24 last year, Mr Museveni, while speaking at Kololo in Kampala, accused both the board and management of corruption.

“The airline was infiltrated immediately (it was revived) by some corrupt elements – employing their relatives, over budgeting, inflating procurement costs, terrible! Terrible things! When I got the information, I dispersed the whole group,” Mr Museveni said.

Cost to taxpayer

If Ms Bisereko Kyomuhendo’s letter is anything to go by, the handshake that has been offered to members of the board is to cost the taxpayer Shs840 million. If they accept the offer to resign, each of the seven board members will get a severance package of Shs33.6 million, which comes down to Shs235.2 million.

Each of them will also be getting paid a retainer of Shs4.8 million computed from June last year to December 2022 when their term of office should be expiring. That will cost the taxpayer another Shs604.8 million. The sum total is a whopping Shs840 million. 

The fights

The conclusions arrived at in Ms Bisereko’s letter suggests that Capt Babu’s reading of the goings-on at the airline was right, but why would anyone tell blatant lies to the President?

Mr Babu says the airline has been the epicentre of power struggles. But who has been at the centre of the fights?

Insiders say the fights have seen the ministry of Works officials face off with the office of the Attorney General and other struggles that have pitted the board of directors against the management, managers against each other, the ministry against the board and the management against a media consultancy firm, Abbavater Group.

AG vs ministry of Works

At the centre of the fight between the office of the Attorney General and ministry of Works officials was a suggestion that ministry officials did not have the power to suspend the board and managers, an argument which the Permanent Secretary, Mr Bageya Waiswa, dismissed.

“That is not true (that the ministry does not have power to take disciplinary action against the board of the management). There is nobody who does not have the power. We have the power,” Mr Waiswa says.

Another point of contention was the Attorney General’s reading of implications of the actions of the latter in trying to solve the problems at the airline.

The spark that ignited the fuse was a letter dated July 30, 2021, in which the Attorney General, Mr Kiryowa Kiwanuka, warned that actions that would be taken by a disciplinary committee that the ministry was thinking of forming would be illegal.

“…please note that the proposed disciplinary committee comprising shareholders, representatives from the Attorney General’s office, State House and the Ministry of Public Service would not have a legal mandate,” read in parts the letter which was in response to a request for advice from State minister for Works, Mr Musa Ecweru.

That notwithstanding, Mr Bageya Waiswa, extended the managers’ suspensions.

“This is to inform you that your suspension from office has been extended by another three months to facilitate the conclusion of investigations and disciplinary proceedings,” reads the August 20, 2021 letter.

The suspension was deemed to be in conflict with the airline’s human resource manual and Section 63(2) of the Employment Act, which provides that any suspension “shall not exceed four weeks or the duration of the inquiry, whichever is the shorter,” but Mr Waiswa defended his actions in a previous interview.

“A suspension means that there is something at stake. The suspensions remain until the issues are exhausted,” he said.

Board vs management

Tensions between the board and the management came to the fore on January 27, 2021, when Mr Cornwell Muleya wrote to the President, accusing board members of pushing “for the promotion of self-interest” and colluding with managers to make money.

“In procurement specifically, management has witnessed cases where board members have met with some members of the management team with a view to find ways of invoice loading and other money-making schemes…This attempted collusion... has tended to divide the management team and has brought inefficiency...” he wrote.

However, Mr Ahabwe writing in a May 31, 2021, letter to the President, attributed the accusation to the board’s decision to query high insurance premiums that the airline had been paying out.

“The board directed the management to present justification for the high prices being paid to contractors, some of whom were procured in an uncompetitive manner…It is probable that such board inquiries and formal direction to the management to review the above contracts is being perceived as interference in the procurement process,” read the letter in part.

Board/management vs Abbavater

One of the biggest fights has, however, been the one in which the media and communications agency, Abbavater Group, has been involved. 

The firm was contracted to run publicity campaigns around the receipt of the first two CRJ900 aircrafts in April 2019 and the August 28, 2019, launch of commercial flights.

Mr Ahabwe wrote in a June 21 letter to the permanent secretaries in the ministries of Works and Finance that Abbavater was sourced through direct bidding on the part of Ms Jennifer Musiime Bamuturaki, who was the airline’s commercial director at the time.

The managing partner of Abbavater Group, Mr Mark Odeke, denies any wrongdoing.

“We cannot be blamed for contractual issues that are internal in nature. We did not award the contract to ourselves. We broke no law. As is usually the case with such agreements, ours was endorsed by the Solicitor General,” Mr Odeke told Sunday Monitor.

Mr Ahabwe had in his letter accused Abbavater of over invoicing and inflating the cost of publicity work around the receipt of the Bombardiers.

 The airline was charged slightly under Shs779 million for hosting 600 guests, an average cost of Shs1.3 million per guest.

Mr Odeke says the budget for the event held on April 23, 2019, was approved by Mr Muleya in an April 18, 2019, letter.

“Following a meeting held… on April 15, 2019,… the airline was advised to increase numbers of invites from 200 guests to 600 guests. …This is to request you to adjust all planning for the event accordingly to cater for the increase in numbers. Kindly send us an updated budget for the event and giveaways to reflect 600 guests….All contractual agreements will be adjusted accordingly to reflect this increase,” read the letter, a copy of which Sunday Monitor has seen.

Management/board vs Ms Bamuturaki

An investigation into the publicity campaign led to recommendations by the management to the board to cancel the contract with Abbavater Group and not to confirm Ms Bamuturaki into service at the end of her probation on grounds of conflict of interest.

Mr Ahabwe claimed in an October 22, 2021, letter to Works minister Gen Katumba Wamala that Ms Bamuturaki renounced her names, Ms Musiime Bamuturaki Jenifer and adopted the names, Jennifer Arnold Lenkai in a February 13, 2019, deed polls.

A copy of the deed poll, which Sunday Monitor has seen, indicates that it was registered with the Uganda Registration Services Bureau (URSB) on March 6, 2019.

“Uganda Airlines has, since February 13, 2019, been engaging services of a masquerader, Ms Jenifer Bamuturaki Musiime, who does not exist in law,” the letter concluded.

Ms Bamuturaki declined an opportunity to take up her right of response in regard to allegations of conflict of interest.

“I do not want to talk to you,” she said before hanging up.

Mr Ahabwe had in the same letter to Gen Katumba stated that Abbavater Group’s post address, P.O. Box 8389, which also appears on its stamp, is the same address that Ms Bamuturaki gave when she first applied for the job with the airline.

The question now is does she have links to Abbavater? Is she a shareholder? Mr Odeke will not say whether she is a shareholder, but said the agency gave her a helping hand when the airline took the decision not to confirm her in the job.

“We bought her two vehicles, a Mercedes Benz ML and a Mitsubishi Pajero and picked the bills for her legal battles. We (Abbavater Group) felt duty bound to help her because it was on account of our contract with the airline that she was penalised,” Mr Odeke says.

Mr Odeke, however, defends Ms Bamuturaki on allegations of over invoicing. Mr Ahabwe had in his letter indicated that the Abbavater invoiced and obtained payment to the tune of $404,000 (approximately Shs1.4 billion) when it should have received $172,000 (approximately Shs607.2million), but Mr Odeke says the allegation was borne out of ignorance.

“An agency issues a Local Purchase Order (LPO) and the clients are invoiced 40 percent at the beginning, 40 per cent in the middle of the contract and 20 percent at the end. Are they suggesting that the airline paid us close to Shs1.5b and we simply ‘ate’ it like that?” Mr Odeke wonders.

The board also accused Ms Bamuturaki of having attempted to appoint a relative, one Ada Nshemereirwe, as the airline’s country manager in Kenya.

Mr Ahabwe argued that Ms Bamuturaki would in the circumstances be unfit to preside over the airline, but Mr Waiswa defended her in a previous interview.

“Allegations can only become a part of your record when they have been proved beyond doubt by a competent law or competent authority. The allegations cannot tarnish one’s name and record,” Mr Waiswa said.

Lack of clarity and direction

Both the suspended board and managers have been complaining about the lethargic pace at which investigations have been carried out. Investigators seem to lack clarity and focus on what to investigate.

Some of the accusations that have been brought up against the different actors seem to have been brought on the basis of allegations contained in Mr Muleya’s January 27, 2021, letter and remarks made by Mr Museveni’s on May 24, 2021, at Kololo.

A copy of a response filed by the manager for ground operations, Mr Harvey Kalama, for example challenges his accusers to provide proof that he had recruited inexperienced people in return for money.

“Who are the inexperienced people who were recruited?... Whoever is alleging must produce evidence,” Mr Kalama wrote in the August 13, 2021, letter to Mr Waiswa.

The August 10, 2021, letter that minister Ecweru wrote inviting the board to respond to allegations including recruitment of relatives and involvement in procurement for “self-interest” was also met with a similar response.

“First, I really want this ‘self-interest’ to be substantiated,” Mr Ahabwe wrote.

It was not possible to talk to Gen Katumba Wamala as calls to his known telephone number went unanswered, but he urged patience in a previous interview.

“So are you the President whom I must explain to? Just be patient. We shall communicate (at an appropriate time),” Gen Katumba said earlier this month.

Three CEOs in 2021

The goings-on have meant that the airline had three chief executive officers (CEOs) in 2021. That includes Mr Cornwell Muleya, who is on suspension, Mr Stephen Wegoye, who briefly served as acting CEO before being assigned director of safety position and finally the acting CEO, Ms Bamuturaki.

That has ramifications for its finances as it has to continue paying the substantive CEO’s salary and other allowances and also meet those of the acting CEO.

If Mr Kyomuhendo Bisereko’s communication of Wednesday is anything to go by, the ministry has partially moved to resolve matters around the board.

It is, however, eight months since the investigation of the management team commenced. 

That an exercise that was meant to take three months has dragged on this long is testimony that what first seemed like a simple short investigation into clear cut cases of corruption and abuse of office has turned out to be more complicated.

A report must eventually come out, but will the image of the airline survive the effects of infighting and such a long drawn out investigation?

Welcome!

You're all set to enjoy unlimited Prime content.