Watch out for forged guarantees
Jul 30, 2003
Crime Watch<br>Government departments and private enterprises should exercise great care when awarding contracts, as the papers that bidding companies present are likely to be forgeries
Crime Watch:
By John Kamya
Government departments and private enterprises should exercise great care when awarding contracts, as the papers that bidding companies present are likely to be forgeries.
The Police recently smashed a racket of fraudster who forge bank guarantees for companies intending to secure big contracts.
A bank guarantee is assurance given by the bankers of a tender bidding or contractor that the company is financially sound.
In the guarantee, the bank undertakes to cover the risks involved should the company awarded the contract abscond from its obligations.
In the forgery racket that was smashed recently, Charles Sanyu a former employee of Barclays Bank, used the experience he had acquired in his former job to issue a bank guarantee of Sh11.4m.
The guarantee written on a Barclays Bank headed paper and appended with a forged bank seal, was issued in favour of Highland Building Contractors Kampala. The company was bidding to carry out repairs on Bushenyi-Bumbeire Kitabi Road.
The guarantee was addressed to the Permanent Secretary of Ministry of Works, Housing and Communications.
The guarantee read in part: “We Barclays Bank of Uganda of P .O. Box 2971, Kampala having our registered office at 16 Kampala Road, hereby affirm that we are the guarantor and responsible to you, on behalf of the contractor for up to a total of sh11,426,606m.â€
The guarantee letter further stated, “we thereby waive the necessity of your demanding the said debt from the contractor before presenting us with the demand.â€
The guarantee document contained a Barclays Bank seal, which looked genuine. However, a forged Barclays Bank seal was found on Sanyu after he was arrested.
A source at the Criminal Investigation Department (CID) headquarters, says many fake companies have been awarded contracts after presenting fake back guarantees indicating that the companies were financially sound.
“The local government authorities have been the biggest culprits as the companies offered these contracts end up doing shoddy work. That is why you see many Primary School classroom blocks and local government building collapsing. The same applies to the roads,†said the CID official, who preferred not be to named.
Erasmus Katusiime, Barclay’s Bank corporate manager and attorney, regretted that a former employee of their bank could get himself involved in forgeries.
“People always attempt forgeries and there is no way we can stop them. It is only unfortunate that in this case the conman was our former employee,†says Katusiime.
He advised the authorities to always cross check with the guaranteeing bank to confirm whether or not the guarantee is genuine.
“The name and address of official signing the guarantee is always indicated, so call them and find out whether or not the guarantee is genuine.â€
In order to guard against rampant forgeries and deceit, tender board authorities may have to do some ground work to establish the authenticity of the contractors they intend to employ and the documents that they present.
Previous contracts undertaken, should be cross checked and these sites visited to ascertain the quality of work done or else incompetent companies will continue hoodwinking them.
By John Kamya
Government departments and private enterprises should exercise great care when awarding contracts, as the papers that bidding companies present are likely to be forgeries.
The Police recently smashed a racket of fraudster who forge bank guarantees for companies intending to secure big contracts.
A bank guarantee is assurance given by the bankers of a tender bidding or contractor that the company is financially sound.
In the guarantee, the bank undertakes to cover the risks involved should the company awarded the contract abscond from its obligations.
In the forgery racket that was smashed recently, Charles Sanyu a former employee of Barclays Bank, used the experience he had acquired in his former job to issue a bank guarantee of Sh11.4m.
The guarantee written on a Barclays Bank headed paper and appended with a forged bank seal, was issued in favour of Highland Building Contractors Kampala. The company was bidding to carry out repairs on Bushenyi-Bumbeire Kitabi Road.
The guarantee was addressed to the Permanent Secretary of Ministry of Works, Housing and Communications.
The guarantee read in part: “We Barclays Bank of Uganda of P .O. Box 2971, Kampala having our registered office at 16 Kampala Road, hereby affirm that we are the guarantor and responsible to you, on behalf of the contractor for up to a total of sh11,426,606m.â€
The guarantee letter further stated, “we thereby waive the necessity of your demanding the said debt from the contractor before presenting us with the demand.â€
The guarantee document contained a Barclays Bank seal, which looked genuine. However, a forged Barclays Bank seal was found on Sanyu after he was arrested.
A source at the Criminal Investigation Department (CID) headquarters, says many fake companies have been awarded contracts after presenting fake back guarantees indicating that the companies were financially sound.
“The local government authorities have been the biggest culprits as the companies offered these contracts end up doing shoddy work. That is why you see many Primary School classroom blocks and local government building collapsing. The same applies to the roads,†said the CID official, who preferred not be to named.
Erasmus Katusiime, Barclay’s Bank corporate manager and attorney, regretted that a former employee of their bank could get himself involved in forgeries.
“People always attempt forgeries and there is no way we can stop them. It is only unfortunate that in this case the conman was our former employee,†says Katusiime.
He advised the authorities to always cross check with the guaranteeing bank to confirm whether or not the guarantee is genuine.
“The name and address of official signing the guarantee is always indicated, so call them and find out whether or not the guarantee is genuine.â€
In order to guard against rampant forgeries and deceit, tender board authorities may have to do some ground work to establish the authenticity of the contractors they intend to employ and the documents that they present.
Previous contracts undertaken, should be cross checked and these sites visited to ascertain the quality of work done or else incompetent companies will continue hoodwinking them.