Lawmakers investigating allegations of nepotism and other irregularities at the National Social Security Fund yesterday cited conflict of interest in a Shs70 billion deal involving the purchase of Umeme shares.
The MPs accused African Alliance (AA), the broker engaged by Umeme Ltd to sell its initial shares under (Initial Public Offering) on the stock exchange, of “colluding” with the power company to tap NSSF money. The MPs made this claim after AA officials led by their chief executive, Mr Kenneth Kitariko, who is also the director of Uganda Securities Exchange, admitted that they represented Umeme and NSSF at the same time.
‘No conflict of interest’
Mr Kitariko, however, said although they were acting for both companies, there was no conflict of interest in the deal. In an attempt to defend AA, he referred to the listing regulations (section 10) but was later asked to withdraw the statement after he failed to show the section which allows brokers to represent both a seller and buyer at the same time.
Mr Kitariko told the select committee that his company broke no law and denied the accusation that AA connived with Umeme to tap the Fund’s cash.
The committee rejected his submission and instead accused AA of being part of what they called a wider scheme to tap NSSF money. The committee chairperson, Mr Vincent Bamulangaki Ssempijja, said AA’s submission completed “a triangle of conflict of interest” in the deal.
Mr Ssempijja (Kalungu East, Indep.) said: “You were guiding Umeme in this transaction and at the same time representing NSSF and you are a director of USE and it’s easy for you to convince your clients (NSSF) to have the deal.”
Umeme’s company secretary, Mr Noah Edwin Mwesigwa, told MPs under oath that the insertion of NSSF in Umeme’s Articles and Memorandum of Association 10 years ago originated from negotiations the power company had with the then Finance minister, Gerald Ssendawula, and other officials at Privatisation Unit identified as Mr Emmanuel Nyirikindi, Michael Opagi and Mr David Ssebabi. In the articles and memorandum, the government committed not to interfere with an envisaged commitment by the NSSF and its workers to invest in Umeme shares.
Officials from Capital Markets Authority, a semi-autonomous body responsible for promoting, developing and regulating the markets industry in Uganda, are scheduled to appear before the committee today.
SOURCE: Daily Monitor