Who’s that girl? Peeling mask on Enrica Pinetti

On Tuesday, the Speaker of Parliament, Ms Anita Among, was compelled to express a “need to save this country.” This followed revelations that three years of ‘construction’ of a specialised hospital in Lubowa had not even yielded a foundation.

The chairperson of the parliamentary Finance Committee,  Mr Keefa Kiwanuka (Kiboga East), was consequently asked to present a report on the matter. 

Finasi, the company—with tentacles in the continents of Europe, Africa and Asia—that in 2019 received a promissory loan worth Shs1.4 trillion from the government of Uganda (GoU) to construct the hospital, will doubtless be illuminated by the spotlight. 

The company is owned by Enrica Pinetti alias, Enrica Maria Aristidina, an Italian investor who is shrouded in mystery.

Ms Pinetti has also recently found herself smack in the middle of another storm. The Italian witnessed a controversial coffee processing deal between the GoU and Uganda Vinci Coffee Company Limited (UVCC) that runs its course in 2032. An investigation by Saturday Monitor has revealed that the Italian is UVCC’s chairperson.

The coffee processing deal gives UVCC exclusive rights to sell and market Ugandan coffee on the international market. It also exempts the company from paying for import duties, value-added taxes, excise duty, stamp duty, and corporate income tax. To top things up, the GoU avails UVCC free land all thanks to the deal.

Troubling portrait
When Ms Pinetti flashed the deal in the company of Finance minister Matia Kasaija as a camera clicked away, Ugandans were always going to take a deep dive into her persona. Data in the International Consortium of Investigative Journalists (ICIJ) Offshore Leaks database sketches a troubling portrait of Ms Pinetti.

The ICIJ says that its database “contains information on more than 800,000 offshore entities that are part of the Pandora Papers, Paradise Papers, Bahamas Leaks, Panama Papers and Offshore Leaks investigations.”

It adds: “The records cover more than 80 years up to 2020 and link to people and companies in more than 200 countries and territories.”

The leaked files, according to the ICIJ, offer evidence and statistics—money transmissions, merger dates, links between companies and individuals—that demonstrate how offshore financial secrecy has spread destructively around the globe, allowing the well-to-do and the well-connected to dodge taxes and powering corruption and economic anguishes in rich and poor nations.

The ICIJ’s Offshore Leaks data of 2010 show that Ms Pinetti was both a shareholder and director of Finmed Design Consultancy Ltd, Medfin Engineering Ltd, and Finasset General Contractor Ltd from April 15, 2008 before transferring out on April 15, 2009. According to ICIJ findings, the jurisdictions of companies were both in the United Arab Emirates (UAE) and the British Virgin Islands, an archipelago found in the Caribbean that is part of the British Overseas Territories. She also had an agent dubbed Common Wealth Trust Fund Ltd for good measure.

It’s not clear which kind of business these companies were engaged in. Calls and e-mails to the Embassy of Italy in Uganda to offer clarity about its citizen went unanswered. The portrait of Ms Pinetti sketched by the ICIJ is of a sly operator whose secret offshore affairs show that she is not shy to interest herself in clandestine deals and concealing assets. When Saturday Monitor asked the Ministry of Finance why due diligence had not alerted its top officials to such a trouble past, the response was tenuous.

“You heard what the Attorney General (Kiryowa Kiwanuka) said,” Jim Mugunga Finance ministry’s mouthpiece, said. “He said the contract was fine, which means he did due diligence on this person and he didn’t find anything wrong. You heard what the Permanent Secretary of Finance (Ramathan Ggoobi) said: that the contract has no problem and that means he is comfortable with this investor.”

In Pinetti’s defence
Mr Kiryowa Kiwanuka recently told The New Vision that the contract doesn’t break any Ugandan law. “This agreement has been on since 2015 and my office handled this matter and did not find it to breach any laws of this country,” he said, adding, “I cleared the agreement for signature and my opinion is that it does not breach any laws of Uganda.”

Ms Pinetti hails from Oltrepò Pavese, an area of the Province of Pavia in the north-west Italian region of Lombardy. She is reported to have registered as many as seven companies in the tax havens of British Virgin Islands  and United Arab Emirates by April of 2008. 

Along with Medfin, Finmed and Finasset, some of the other companies include Finasi Engineering Arca Magna and Asico Consulting Group Ltd. All seven entities are headquartered at the Trinity Group in the United Arab Emirates (Dubai).

While UVCC is situated in Uganda (Plot 2, Summit View in upscale Kololo), an investigation by Saturday Monitor has revealed that the company’s share capital of $10m—divided into 1,000 ordinary shares of $10,000 apiece—is split by four persons and one entity—are either based in Dubai or the United Arab Emirates’ largest state of Abu Dhabi.

The United Arab Emirates has over the years established itself as one of the world’s fastest-growing tax havens. In 2021, the Tax Justice Network (TJN) estimated that multinationals rerouted over $200 billion to the country to avoid taxes.

A year earlier, in 2020, data organised cooperatively by the TJN, Public Services International (PSI), and Global Alliance for Tax Justice (GA4TJ) showed that governments in Africa lose about $25 billion annually to corporate abuse by multinationals who transfer profits to offshore tax havens and to individuals engaging in tax evasion through undeclared assets.

Of these losses, research by the TJN indicated that $23.2 billion (about Shs82 trillion) is lost through tax abuse by multinationals and $2.3 billion (about Shs8 trillion) is lost to evasion by individuals. The money in question is equivalent to the paying annual salaries of 10.1 million nurses on the continent or enough to pay $21 per person of the continent’s 1.2 billion people.

Cost implications
Whilst over $1.2 billion ( Shs4 trillion) is lost by East African governments—Kenya, Ethiopia, Burundi, Tanzania, Uganda, South Sudan, and Rwanda—the research showed tax loss of $25.7 billion (about Shs91 trillion) every year is equivalent to 52.46 percent of the continent’s combined health spending and equates to 28.67 percent of Africa’s combined education spending.

“Multinational corporations paid billions less in tax than they should have by shifting $1.38 trillion worth of profit out of the countries where they were generated and into tax havens, where corporate tax rates are extremely low or non-existent. Private tax evaders paid less tax than they should have by storing a total of over $10 trillion in financial assets offshore,” the research found.

Though research indicated that in the East African region Kenya is hardest hit, losing $565.8 million (Shs1.9 billion) annually—$502.4 million (Shs1.7b) to corporates and $63.3 million (about Shs224b) to individuals— and depriving the country of much-needed money for development and provision of essential services, Uganda didn’t fare any better.

Specifically, Uganda incurs losses of $115.3 million (Shs407b) of which $96.5  million (Shs341b) is caused by corporate tax dodging and $18.7 million (Shs63b) by the individual—an equivalent of 31.43 percent of public health expenditure or annual pay of 83,658 nurses. 

Uganda also inflicts tax loss of $14.3 million (Shs50b) on other countries, the research found.
Yet the GoU has been quick to defend Ms Pinetti even in the face of the stalled Lubowa hospital project that left Ms Among perplexed. 

Mr Ggoobi, the Secretary to the Treasury, recently attributed the delays to “rains and Covid-19.” The parliamentary committee on finance appeared to question this defence and in fact asked the Finance ministry to re-allocate the Shs319billion earmarked for the hospital in the 2022/2023 budget.

As for the coffee deal, lawmakers are threatening to torpedo the deal which they predict—if left to stand—will create a monopoly. 

Government functionaries—including Mr Kasaija, Mr Ggoobi, and Ms Pinetti—have all been summoned.

Amidst all of this has been President Museveni’s silence. Shadow Finance minister Muhammad Muwanga Kivumbi (Butambala County) says Ugandans should not expect Parliament to play the Mr Fix-it role.

“Parliament is like a mortuary,” he said, adding, “It receives a dead body. We can only find out the cause of death.”

Issue
A year earlier, in 2020, data organised cooperatively by the TJN, Public Services International (PSI), and Global Alliance for Tax Justice (GA4TJ) showed that governments in Africa lose about $25 billion annually to corporate abuse by multinationals who transfer profits to offshore tax havens and to individuals engaging in tax evasion through undeclared assets.