THE launch of the National Insurance Corporation Ltd (NIC) initial sale of shares to the public was disrupted yesterday when two top Makerere University academics protested the listing of the company.
However, Makerere University Academic Staff Association (MUASA) wants the listing of the insurance firm on the securities exchange blocked until it settles queries on the university’s pension fund.
The head of the academic staff, Tanga Odoi, said the company owes sh17.7b to about 2,000 university employees.
At yesterday’s launch, the function went according to plan before trouble brewed during the question-and-answer session.
Drama started when Jim Mugunga, the Privatisation Unit spokesperson, did not pick the lecturers’ representatives who had raised their hands to state their grievances.
Infuriated by Mugunga’s action, Dr. Tanga Odoi, the academic staff head, stood up and shouted: “This is unfair and we cannot allow NIC to con Ugandans.”
“We were not involved in the preparation of the prospectus and, therefore, the process was not systematic,” he charged.
“Unless NIC clears the sh17.7b it owes to university employees, mostly lecturers, we cannot allow such a scam to be offered to the public.”
The emotionally charged Odoi reiterated that the insurances contract with the university ended four years ago, warning that the public should think twice before buying NIC’s shares.
“This is hot air and Ugandans should be very careful. We are going to court to ensure that justice takes its course,” he vowed. “The lecturers are poorly paid and cannot afford to lose their pension funds just like that.”
Tanga said their dealings with NIC ended on June 30, 2005 and they had saved sh17.7b with them, but NIC only acknowledged sh16.3b. Odoi’s outburst generated an exchange between him and NIC officials.
NIC’s prospectus confirms Tanga’s assertions. “Between the year 1996 and 2005, NIC managed a deposit administration plan for Makerere University employees,” read the prospectus.
Odoi’s outburst caused commotion and Mugunga was forced to end the function unceremoniously. Some guests who had been lined up to make remarks at the event failed to do so.
Earlier, David Ssebabi, the director of the Privatisation Unit, said initial public offer encourages good ethical business standards and prudent management.
NIC listing has been an on-and-off affair for the last three years, disrupted by the dispute over the Makerere pensions fund. The insurance company was established as a state-owned entity in 1964.
The Government sold a 60 percent stake to Nigeria’s Industrial and General Insurance Company in 2005.
Now NIC is selling 40 percent stake to the public in the new share issue, expected to take one month. Trading of the 161,552,000 shares on the stock market is expected to start in February.
The other 60% shares are owned by Industrial and General Insurance Plc, a Nigerian firm.
