By Mary Karugaba
Government will have no alternative but to sell off city businessman Hassan Basajjabalaba's properties in order to recover sh21b debt that he owes it.
Deputy Secretary to Treasury Keith Muhakanizi told MPs that in case Basajjabalaba fails to pay; Government will sell off the properties that he deposited with Bank of Uganda as security for the payment.
Muhakanizi however did not indicate the period in which Basajjabalaba should pay back the money before his properties are sold off.
"We plan to sell off the properties and recover the money. This is the only way we can get back this money. We have the titles for these properties," Muhakanizi said as MPs built pressure on him to have the money recovered from Basajjabalaba.
But during the meeting on Wednesday, it was discovered that although BOU had the titles, Government does not know whether the properties still exist or their value.
Both the Accountant General and Muhakanizi admitted that they did not know their current status
The money to Basajjabala was a credit facility obtained by the Government that was on-lent to Bassajjabalaba Hides and Skins Ltd (BHSL) in 2003 after depositing various land titles with from Bank of Uganda.
Muhakanizi explained that the payments were made on the understanding that when Government compensated Bassajabalaba sh46b, it would deduct the money.
The compensation has however hit a snag after Parliament rejected the payment which has since risen to over sh140b.
In his annual report for financial year 2007/2008 to Parliament, the Auditor General John Muwanga indicated that Government stood to lose in the event of the company failing to pay back the loan because the properties which BHLS had presented as security had their "caveats fraudulently cancelled and the properties sold by the company.
He recommended that the matter be investigated with a view of revoking of the cancellation of the caveat.
Bank of Uganda legal officer Margaret Kasule told members that when reports of fraudulent sale of the properties rose, Bank of Uganda took the matter to Court and won the case.
"Court ruled that if any sale was made, it was illegal and therefore should not be recognised. This means the properties are still in our hands," she said.