Parliament-A former company secretary at the National Social Security Fund, Mr David Nambale, has said his boss at the time ignored legal aice he gave on the initial purchase of Umeme shares.
Using the analogy of a football team, Mr Nambale said when he attempted to aise that the Initial Public Offering transaction goes to the board for ratification, the captain (former managing director Mr Richard Byarugaba, instructed that he should not cross the line, and that there was a decision that the “goal” should be scored in a certain manner. As such, he said, he had no choice but to comply.
But Mr Byarugaba told Daily Monitor on phone that he did not “recall ignoring any legal aice for the IPO and certainly would never refuse to call a meeting.”
Seeking legal aice
The House committee inquiring into alleged irregularities at NSSF also heard from Mr Nambale that he wrote to the Solicitor General seeking legal aice after NSSF had secured “an irrevocable” bank guarantee through Standard Chartered Bank confirming the purchase of Umeme shares worth Shs51b.
Mr Nambale said as legal aisor to NSSF, he was not consulted.
On November 7, 2012, he said Mr Byarugaba and Mr Patrick Ayota, the chief finance officer, submitted an application for the shares through African Alliance, the brokerage firm handling the IPO.
“It [IPO] was not an ordinary transaction there was tremendous pressure written and unwritten. By the time I got the bank guarantee issued on the instructions of the MD and chief finance officer, the horses had already bolted but I had to write [to the Solicitor General] because I was between a rock and a hard place,” Mr Nambale said.
Kalungu West MP Joseph Ssewungu faulted Mr Nambale for attempting to sanitise “a “flawed process”, saying the SG had complained that “since the transaction has already been concluded …seeking legal aice is not for mere formality.” However, Mr Nambale explained that, “Although the horses had bolted, there was a window for the SG to remedy the situation before the IPO deadline of November 15.
When MPs asked him to confirm whether there is a mafia group at NSSF, Mr Nambale said: “NSSF is hostage to the mafia.
There are strong forces for and against every single bidder. There is an invisible but powerful force, influencing decisions at the Fund.”
He also said in the legal due diligence report, he noted a conflict of interest because the broker engaged by Umeme to sell its shares (Africa Alliance) had an existing contract with NSSF to manage its stocks on the exchange.
UMEME TAX DISPUTE
Mr Nambale informed the committee that while it had been thought that Umeme’s tax dispute with URA was more than Shs6b, the legal due diligence found a higher figure of Shs7b and they wanted the matter to be resolved because it would impact on the profitability of the business.
He also said he had recommended that all the disclosures in Umeme prospectus be investigated to be sure that they are accurate but this was ignored and the deal was ostensibly completed.
SOURCE: Daily Monitor