Tuesday, August 9, 2011


Bbumba faces inquiry over Shs140b pay to city tycoon
By Yasiin Mugerwa

Posted Tuesday, August 9 2011 at 00:00

Finance Minister Maria Kiwanuka is investigating top ministry officials, including her predecessor Syda Bbumba in relation to the Shs80 billion paid to city businessman Hassan Basajjabalaba, in a deal President Museveni has described as “scandalous and unacceptable”.
A top finance ministry official yesterday told Daily Monitor that Ms Kiwanuka had been tasked by the President to investigate the matter after the head of state threw out an earlier explanation by Ms Bbumba before her transfer from the ministry.
Ms Kiwanuka yesterday declined to comment on the matter, saying it would jeopardise the inquiry although Daily Monitor has learnt that her brief involves investigating circumstances under which the money was paid and the possibility of recovery.
Although the Auditor General, Mr John Muwanga, advised against the payment of Shs142.6 billion to the businessman in compensation for loss of business, Central Bank Governor Tumusiime-Mutebile in a July 16 letter to the finance minister confirmed that that central bank had already paid the tycoon Shs82.8 billion.
Mr Mutebile had on June 15, upon request by Ms Bbumba, written to four banks asking them to offer credit facilities to the businessman’s Haba Group of Companies.

Other players
Although Ms Bbumba yesterday promised to get back to this newspaper with her explanation, she had not done so by press time. But in documents seen by Daily Monitor, Ms Bbumba says the claim originated from the Attorney General’s chambers. BoU officials yesterday said the bank okayed the payment following Ms Bbumba’s instructions.
The director of communications at the bank, Mr Elliot Mwebya, said: “The bank got information late. But the outstanding amount (Shs59.8 billion) is not going to be released to Mr Basajjabalaba.” He added: “To recover the money we are going to liaise with other stakeholders including the Attorney General and Ministry of Finance to craft a way forward.”
Bank of Uganda issued the guarantees to the four commercial banks totalling $65.35 million in anticipation of government settlement of the claims by Haba Group.
This followed a December 3, 2010 letter to the central bank by Ms Bbumba, although the previous day, the Deputy Secretary to the Treasury, Mr Keith Muhakanizi, had advised against the payment until verification was complete.
Daily Monitor has also learnt that the Attorney General’s chambers might find it difficult to pursue legal action considering that it cleared the payment to the businessman.

On November 22, 2010, Prof. Khidu Makubuya in an internal memo to the Solicitor General (SG) approved the payment and revised the amount from Shs96.4b to Shs142.6b.
SG Harriet Lwabi a week later wrote to the Treasury Secretary Chris Kassami—confirming government’s position on the claim. But the new Attorney General, Mr Peter Nyombi, said: “After studying the matter, then we shall decide which action to take.”

Businessman’s defence
Mr Basajjabalaba, speaking through an aide, told Daily Monitor that his claim is genuine and “certain elements” were bent on ensuring he does not get paid for the breached contracts.
Mr Basajjabalaba’s Haba Group of Companies, through four of its subsidiaries; Sheila Investments, Yudaya International, Victoria International and First Merchant International Trading company, entered into lease agreements and management contracts with the government for four properties namely; Nakasero market, Shauriyako market, Constitutional Square and St. Balikuddembe market (formerly Owino market) during the 2009/10 financial year. However, all the agreements were later terminated by the government after the market vendors and Parliament opposed the move.

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