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LC bicycle scam: Court set to deliver verdict
Publish Date: Jun 27, 2014
LC bicycle scam: Court set to deliver verdict
Interdicted local government permanent secretary John Kashaka Muhanguzi is accused of sham LC bicycle importation. FILE PHOTO/Nicholas Oneal
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By Edward Anyoli   

KAMPALA - The Anti-Corruption Court is expected to deliver its judgment today in a case where interdicted local government permanent secretary John Kashaka Muhanguzi is accused of sham LC bicycle importation that cost government over sh4bn.

Kashaka’s co-accused are; Henry Bamutura (the principal accountant), Robert Mwebaze (Principal procurement officer), Sam Emorut (assistant commissioner for policy and planning), Timothy Musherure and Adam B. Aluma, an administrative officer.

During the trial conducted by Justice Catherine Bamugemereire, 17 witnesses testified, most of them saying the process to secure the 70,000 bicycles was irregular.

Prosecution led by principal state attorney Jane Frances Abodo, during final submission, asked court to convict all the accused, saying prosecution had proved beyond reasonable doubt.

Silva Kakumba, a court assessor, also asked court to convict all the accused.

He said Kashaka, in a letter dated March3, 2011 to Bank of Uganda, deliberately authorised a payment of 40% letter of credit which he did without the approval of the contract committee.

The former PS and Bamutura are accused of causing financial loss by authorising payment of US$1,719,454.58 to the purported supplier M/s AITEL, despite being warned by Bank of Uganda that documents presented by Stanbic Bank did not comply with terms for letters of credit.

The two, according to prosecution, also wrote to Bank of Uganda amending the conditions for the final destination of the bicycles from the villages and parishes to Kampala. They never consulted the contracts or adjusted the contract price accordingly.


Kashaka (right) with family members at the Anti-corruption Court in 2012. PHOTO/Kennedy Oryema

The State also accuses Kashaka and Emorut of signing the bicycles’ contract with irregularly amended terms which allowed payment of 40% of the money on presentation of shipping documents instead of full payment on delivery of the bicycles.

They also allegedly extended the bicycles’ delivery period by one month.

According to the State, Mwebaze also advised bidders to ignore technical specifications and reduced the bid security to sh300m without consulting the contracts committee.

Among other complaints, Emorut, Mwebaze, Aluma and Musherure, are accused of irregularly advising that the M/S AITEL met the minimum requirements and experience of having supplied 70,000 bicycles in a single lot.

They also irregularly recommended that M/S AITEL had complied with the payment terms.

The State also argues that in addition, the four recommended M/s AITEL despite it having no joint venture agreement with Amman Impex as stated in the solicitation documents.

According to the State, they should have disqualified M/s AITEL.


Also related to this story

Kashaka pinned in sh4b LC bicycle scam

Insurer says fraud halted sh1.1b LC bicycle payment

Bank of Uganda blamed for LC bicycle scandal

Accountant General denies role in LC bicycle scam

Firm fails to deliver LC bicycles

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