Cash bonanza rocks national flag carrier

The Board of Directors of Uganda Airlines is investigating circumstances under which the management sanctioned the spending of hundreds of millions of shillings on an online media campaign and other sweeteners.

The expenditure came out in a financial report that had been prepared for the board, but leaked to Sunday Monitor.

Ms Priscilla Mirembe Serukka, the chairperson of the board of the airline, said whereas the board was yet to receive a formal copy of the financial report referred to, it would interest itself in the contents which Sunday Monitor shared with her.

After poring over the dossier, Ms Serukka—without offering details—said “we found that some of the contents had been exaggerated, others were found to be true and others untrue.”

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According to the report, Uganda’s flag carrier entered into an agreement with the Independent Journalists Association of Uganda (Indoja-U) in December 2021. The organisation brings together journalists that file their stories with online publications.

The report indicates that 23 online publications and two individual journalists were enlisted to burnish the airline’s image.

Terms of agreement

Under the terms of the agreement, which then acting chief executive officer of the airline, Ms Jennifer Bamuturaki, signed on behalf of the airline and Mr Andrew Irumba on behalf of Indoja-U, the online publications were to, among other things, provide two online banner adverts with links to the airline’s website and mandatorily cover all the activities at the airline.

The publications were also expected to offer routine online editorial support in the form of exclusive interviews with the airline’s managers, offer external support to the public relations department, and also provide live social media coverage at the airline’s events.

The agreement was, however, not witnessed by the company Secretary, Mr Bisereko Kyomuhendo.

Sunday Monitor has seen documents that indicate Shs156m was spent on air tickets to Dubai in the United Arab Emirates. The money also catered for accommodation, as well as per diem for the online journalists and bloggers.

Ms Bamuturaki did not respond to our attempts to get her side of the story.

Ms Shakira Rahim Lamar, the head of corporate affairs and public relations at the airline, however, told Sunday Monitor that the revelation of misappropriation of taxpayers’ money was untrue and aimed at besmirching the image of the airline.

But she at the same time hastened to add that there would be an internal investigation to establish the veracity of the allegations.

Media campaign

The report, however, shows that the new management was abusing funds barely a year after being entrusted with the reins at Uganda’s flag carrier.

“The old management was suspended on April 29, 2021, but by then, there was no such campaign or request from any user department for online blogger services,” the report reads in part, adding, “This means the airline paid for services that never existed. There was forgery on the contract period that led to fraud and loss of money.”

The airline was invoiced for services that it reportedly started receiving in April 2021. This was eight months before the contract was signed. It still proceeded to pay Indoja-U Shs156m, with the first instalment of Shs117m paid in December 2021 and the other instalments in April this year.

Sunday Monitor has also established that Indoja-U submitted its demand note on December 1, 2021, 23 days before the signing of the agreement. The initial Shs117m was paid in December, three days after putting pen to paper.

Receiving account query

It has also come to light that payments were remitted to Spy Uganda’s bank account and not that of Indoja-U. Mr Andrew Irumba—the president of Indoja-U, who also doubles as owner of Spy Uganda—explained that this was done because the Indoja-U account in UBA bank had been closed.

“Those same people who are complaining have spent three years without remitting their monthly and annual fees. This finally affected our account in UBA bank. The account was closed. We only got to know when Uganda Airlines was going to pay us. I had to improvise my own account,” Mr Irumba said.

What is important, Mr Irumba argued, is that all those who worked to clean up the airline’s image were paid. A cursory look at Mr Irumba’s website reveals that 93 puff pieces were written since the signing of the contract and the second in the last weekend of June.

According to the report, the contract for the media campaign was not cleared by the local contracts committee.

“This contract was never approved by the contracts committee, a clear breach of procurement procedures and requirements for any contract above Shs5m,” the report reads in part.

PPDA response

Sunday Monitor has established that the old management of the airline—arguing that there was need to “facilitate easy processing of business given the unique nature of the aviation industry”—sought and obtained accreditation from the Public Procurement and Disposal of Public Assets  (PPDA) to procure some goods and services without subjecting the procurement process to competitive bidding.

Mr Chris Magoba, the spokesperson of the PPDA, however, said media services were not on the list of services that were cleared to carry out direct procurement.

“Uganda airlines uses targeted advertising. If they want particular clients, they use a particular media, which they think is suitable for them to reach those clients,” Mr Magoba said, adding, “From our records, it (media) was not one of the areas accredited.”

Indoja-U speaks out

Mr Irumba, nonetheless, said questions around the contract are being fuelled by Abbavater Group. The media and communications agency ran publicity campaigns following the unveiling of one of the two CRJ900 Bombardier aircraft in April 2019. Its services were also put to use during the launch of commercial flights on August 28, 2019.

The directors of Abbavater Group are Mr Mark Odeke and Mr Lesale Odupoi, a Kenyan national. A top official in the airline (name withheld) is also believed to have a stake in the firm.

“We got the contract long after Abbavater had lost its contract. Why is Mr Mark Odeke obsessed with this issue between Indoja and the airline? Is he an employee or a member of any of the two?” Mr Irumba wondered.

Mr Odeke has, however, disassociated himself from the goings on at the airline, saying—whereas he has never attacked Indoja-U or the airline—Indoja-U members have been publishing false stories about him.

“Some of those stories have been appended to the claims that Indoja-U filed with the airline. Do stories about my person add value to the airline?” Mr Odeke asked, alluding to a top official in the airline allegedly seeking to settle a score with him.

Questionable HR payout

The report, which also contains allegations that some senior managers have been contravening the airline’s policy on salary advances—and in the process drawing huge sums—paints a troubling picture. It indicates that last October, the airline—which has been working with a technical advisor in the human resource (HR) department—enlisted the services of a consultant to review the HR manual; something that could have been done by the technical advisor. The mode of payment was even more vexing.

The report adds: “The payment voucher shows that the technical advisor to HR requested for the said payment and took the money on behalf of the purported consultant and in cash. At the same time, whereas the technical advisor is meant to be a consultant who should be paid as a contractor and from whom withholding tax should be deducted for onward remittance to Uganda Revenue Authority, the said technical advisor is on the airline’s payroll. That means the airline is contributing to his National Social Security Fund savings and bequeathing upon him benefits that he should not be accessing.”

Dubai and other trips

Sunday Monitor understands that besides the cash payments, the airline also flew out Indoja-U members to Dubai and other selected cities. They were accommodated for two nights, while also receiving per diem for good measure.

The actual amount spent on the air tickets, accommodation and per diem is not provided in the report. 

According to the Uganda Airline’s website, however, a ticket for a round trip from Entebbe to Dubai (United Arab Emirates) costs $397 (about Shs1.5m). So if all the 25 members of Indoja-U travelled to the Middle East, the airline burnt through at least Shs37.5m on air tickets.

Sources within the airline told Sunday Monitor that the members were accommodated in a $200 (about Shs750,000)-a-night facility. That means the national flag carrier spent Shs18.8m on their accommodation.

Mr Irumba declined to comment about the trips. He also declined to reveal what was paid to each journalist as travel per diem, insisting that all the journalists who worked on the campaign know and can tell what they got. One journalist, who went on a trip to Johannesburg despite not being a member of Indoja-U, said they received a one-off fee of $100 (Shs370,000). The journalist said he did not have either a visa or passport and thus never left the airport.

We understand that the journalists who had visas and passports on this and other trips cost the airline much more. 

Working on the assumptions that a per diem of $400 (about Shs1.5m) per night that is advanced to Ms Bamuturaki for trips is the standard, and that all the 25 Indoja-U members made the trip, then the airline had to pick a tab worth Shs35.5m.

Taken together, the airline spent in excess of Shs300m on the media campaign.

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