Fight over UTL

The powerful people behind Bemanya

Kampala, Uganda | HAGGAI MATSIKO | Uganda Telecom Ltd (UTL) looks like a typical company in shambles. In April 2017 it run to court to block a petition seeking to wound it up partly owing to Shs709 billion debts it had accumulated over the years.

But UTL’s image of financial woes is a facade. Pick it up and dust it and you have yourself a money-minting gem.

The company is currently ranked very low in the telecoms market; with an estimated 3% of subscribers. It runs on near obsolete 2G technology where the competition is on 4G. Its offices in the centre of town are drab, with a thick sheet of brown dust.

But UTL has a prized asset: UTL is the only telecom in Uganda that owns an undersea cable—it owns 9% of the submarine cable company, West Indian Ocean Cable Company (WIOCC).

Throw in other assets like land, buildings, machinery, and spectrum, and you have an asset value estimated at $84 million (Approx. Shs300 billion).

Highly placed people in politics and business, locally and internationally, know this. That is why some of them want to buy UTL and others want to collect a commission from selling it.

Dust is rising in a fight between the contenders and their promoters.

At the centre of it all are Evelyn Anite; the minister of state for Finance in charge of Investment and Privatisation and the man she appointed as UTL administrator Bemanya Twebaze; the Chief Executive Officer of the Uganda Registration Services Bureau (URSB) who is one of the little known most powerful people in Uganda. As URSB boss, no business or major financial transaction can be done in Uganda without Bemanya’s knowledge and signature.

So most people want to be in Bemanya’s good books, others want to control him. But Anite wants him out as administrator of UTL. She accuses him of insubordination. But Bemanya has his own ideas. He has told Minister Anite that she has no power over him and cannot remove him.

President Yoweri Museveni has been sacked into the fight. He was expected to resolve the same at a cabinet meeting on July 1. But he didn’t chair cabinet that day because he had a state visitor—Sierra Leone President Julius Maada. The next day he met Anite. But details of this meeting were still scanty by the time we went to press. The main question was whether Museveni would back Anite and kick out Bemanya or leave him in his place.

Going into the meeting Anite was saying it was Museveni who advised her to kick out Bemanya. This was contained in a June 28 letter to him detailing her long running fight with Bemanya, his refusal to have UTL audited, a breakdown in communication, and his refusal to give the Finance Ministry updates on the operations of UTL.

“We have lost confidence in the current administrator, and I am convinced that he can no longer effectively perform the role,” reads Anite’s letter in part.

She concluded the letter by calling on the President to intervene and offer guidance.

Anite ran to Museveni after being rebuffed by the Deputy Attorney General, Mwesigwa Rukutana.

Apparently on June 26, Anite had written to the Attorney General’s Office for legal support to remove Bemanya. She wanted the AG to petition court to remove Bemanya because UTL is under administration and is, according to the law, is supervised by court.

Rukutana wrote: “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. Relatedly, the Minister of Finance Planning and Economic Development has no supervisory powers over the Administrator. Even if he had locus, there are no grounds to remove the Administrator of UTL from office.”

Under the law, creditors, a provisional administrator or administrator are the ones who can petition court to eject an administrator if he is not fulfilling their obligations. The Finance Ministry is a shareholder—owns 31 % of UTL, the rest 69 % is owned by a Libyan company called Ucom. However, several government entities are creditors to UTL because it is indebted to them. URA demands Shs. 157 billion from UTL, NSSF Shs. 10 billion, and UCC Shs.33 billion. Owing to this, Anite argues that government is both a shareholder and a creditor. But both Bemanya and Rukutana argue that these entities—URA, UCC, and NSSF—are separate legal entities and cannot be treated as government. It is on this ground that they claim Anite or the Finance Ministry are not creditors and therefore, have no locus, to cause Bemanya’s dismissal.

Not convinced by this argument Anite had first gone to parliament. She told Parliament that although she is supposed to supervise UTL operations as minister, she has been left in the dark about the operations of the company.

Both Anite and Kasaija had severally requested to audit UTL but were blocked. The first time, in November 2018, it is Kasaija who requested the Auditor General. Six months later, in April 2019 the Auditor General replied noting such an audit would pose legal challenges given that the UTL administration was now a court matter. He also noted that it was not prudent to audit the company given that the administrator was trying to look for investors.

Anite attempted to send in Finance’s auditors. They too were blocked. Bemanya wrote to officials at Finance saying he shared the Auditor General’s view.

“The watchman (Bemanya) has stopped the owner (government) from accessing the company,” Anite told parliament in June. But the Speaker of Parliament, Rebecca Kadaga piled frustration on Anite when she noted that Anite could not remove Bemanya because the High Court was the supervisor of the UTL administrator.

So Rukutana warned that Anite’s request could tantamount to contempt of parliament.

He added that interfering with the administrator could undermine the process of sourcing a new investor and lastly, that as advised by the Auditor General on April 24, it would not be prudent to audit UTL at a time the administrator is trying to search for an investor.

A day later, the Attorney General William Byaruhanga also weighed in on the side of Bemanya.

Until 2012 when he was appointed Registrar General, Uganda Registration Services Bureau (URSB), few Ugandans knew Bemanya. But he did not just chance on that job.