UTL: How Museveni overruled Anite

Kampala, Uganda | THE INDEPENDENT | Twebaze Bemanya, the Registrar General, Uganda Registration Services Bureau (URSB), will remain the administrator of Uganda Telecom and continue with the process of identifying an investor to partner with government to revamp it, President Yoweri Museveni has directed.

The president’s directive was first communicated to Justice Minister Kahinda Otafiire in telephone call the morning of July. 3 and followed with a letter the same day.

“As I have guided on several occasions, given the strategic importance of UTL to the economy, Government gas been in the process of identifying a suitable investor/s to partner with to revamp UTL as opposed to divesting it. The above position was also taken by Cabinet,” President Museveni’s letter reads in part, “Therefore, no actions contrary to Cabinet’s position should be taken. Further, Cabinet must always be consulted on any investment or related decisions concerning UTL before they are taken.”

After receiving this letter, Justice Minister Kahinda Otafiire wrote to Bemanya on July. 4 to communicate the President’s directive.

“As administrator of the company, you are requested to expedite the process of sourcing a strategic investor,” Otafiire’s letter reads in part, “you are required to continually update me on the progress to enable me report to cabinet accordingly.”

These letters are a major victory for especially Bemanya and officials at the Attorney Generals office who have been locked in a major fight with Evelyn Anite, the minister of state for Finance in charge of Investment and Privatization, over control of UTL.

In this fight, Anite had sought to have Bemanya replaced as the administrator of UTL.

“We have lost confidence in the current administrator, and I am convinced that he can no longer effectively perform the role,” Anite wrote to President Museveni on June.28 calling for his intervention in the matter.

This was after being informed by the Deputy Attorney General, Mwesigwa Rukutana that she had no powers to cause Bemanya’s firing.

Rukutana was responding to her letter dated June 26, in which she sought the Attorney General’s Office for legal support to remove Bemanya.

As Administrator of UTL, Bemanya is supervised by the High Court and it is only this court that can fire him. Court can only fire him if the creditors of UTL petition it. As state minister of finance in charge of investment and privatization, Anite represents government, a shareholder in UTL with a 31 percent stake. A Libyan company called Unicom owns the other 69 percent stake.

As such, Rukutana wrote responded to Anite noting that “The Minister of Finance Planning and Economic Development as a shareholder of UTL has no locus to apply to court to remove the administrator and any such application is bound to fail. Even if he had locus, there are no grounds to remove the Administrator of UTL from office.”

However, because several government entities—URA, NSSF, and UCC—are creditors to UTL, Anite has been insisting that government is both a shareholder and a creditor.

But both Bemanya and Rukutana have dismissed this position saying that these are separate legal entities and cannot be treated as government.

But Anite had insisted she had powers to kick out Bemanya at one point referring to him as a crooked lawyer entrenched in the office of the Attorney General. On June.28 Byaruhanga also wrote to Anite saying she had no grounds to instruct the Attorney General and no power to cause Bemanya’s dismissal.

Anite had then also taken the matter to parliament. Bemanya was accused of being in cohorts with a cabal with in government that seeks to liquidate UTL and asset strip it.

Particularly, Anite accused him of blocking efforts by officials at the Finance Ministry including herself from having UTL audited by the Auditor General. But the Auditor General had declined to audit the company citing two major reasons. One, he argued that auditing UTL was not prudent given that the administrator is in the midst of looking for an investor for it. Two, the Auditor General had warned that auditing UTL would pose legal challenges, as its administration is a process supervised by court.

Speaker of parliament Rebbecca Kadaga also cautioned that Bemanya was supervised by the High Court.

Anite then escalated the matter to President Museveni. She hoped President Museveni would side with her. But in the July.3 letter, Museveni has picked Bemanya’s side and essentially put an end to a power struggle between Anite and Bemanya over UTL matters.

This power struggle started months after Bemanya was appointed the administrator UTL. Bemanya was appointed in that role in April 2017. His appointment was intended to help lead the process of revamping UTL after it was put under administration to protect it from being liquidated after it became insolvent—an audit by PWC in April 2017 found that UTL had accumulated debts of Shs. 709 billion against assets of Shs. 145 billion. This was partly due to poor management and the withdrawal of the majority shareholder, Ucom.

Part of Bemanya’s job included securing investors to partner with government in revamping the company. And that is where Bemanya appears to have fallen out with Anite.

Several companies including Mauritius’s Mauritius Telecom, Nigeria’s Taleology, Neubacher Montage LLP, Telecel Global, and Bayliss Consortium had put in bids to bag the deal.

However, at a cabinet meeting, Anite accused Bemanya of attempting to bribe her on behalf of one of the competitors–Taleology. To get to the bottom of the accusations, President Museveni set up an probe committee comprised of Attorney General Byaruhanga, Minister Bahati, and Internal Security Organisation boss, Frank Kaka Bagyenda. The committee later cleared Bemanya. It later emerged that Anite had also been pushing Bemanya to award the deal to Mauritius Telecom but he had refused.

Anite was vouching for state-owned Mauritius Telecom. She had told cabinet that Taleology did not have cash or technical expertise. A May 25 2018 due diligence report undertaken by the Financial Intelligence Authority (FIA) noted that Taleology would not be an ideal partner in the deal. FIA noted that Mauritius Telecom was a viable partner.

But Taleology had put in the highest bid of $70m. Mauritius Telecom had offered only $45m emerging second.

However, Anite was later proved right as Taleology failed to raise the pledged $ 70 million and was subsequently kicked out of the deal. Bemanya had embarked on a process of finding a new investor when the fight with Anite intensified.

But now Bemanya appears to have won the second round against Anite because he claims he is already turning around the company. At a recent press conference to make his case, he noted that he had since verified the company’s assets and found these had been undervalued and debt overstated. PWC put the asset value at $ 40 million.

Bemanya says he found that they are double–$ 84 million. The debt that was recorded at Shs. 709 billion before he came in, he said, had since been verified and found to be slightly over Shs. 500 billion. He also claimed that the company’s operations have stablised and its revenue is growing. President Museveni appears to have listened.