MPs Mawanda, Mudimi allegedly used cooperative cash to pay debts

____________

KAMPALA - The Office of the Director of Public Prosecutions (ODPP) has presented an indictment in court, claiming that legislators Michael Muranga Mawanda and Ignatius Wamakuyu Mudimi used cooperative cash to sort out their debts arising out of court disputes.

The prosecution evidence is contained in an indictment report tabled on Friday (July 19, 2024) by the Chief State Attorney from the ODPP, Edward Muhumuza and  Senior  State Attorney Raymond Mugisa to the Nakasero-based Anti-Corruption Court in Kampala.

According to the indictment, Mawanda initially got sh1b in 2021, which he allegedly used to pay Buyaka G.CS Limited Creditors and another sh200m to settle his debt arising out of a court dispute case no.28 of 2020 at the Commercial Division of the High Court.

The case had been filed by Eng. George Turyakira against Mawanda. The money was purportedly paid to Turyakira on October 7, 2021 and November 24, 2021, respectively.
The indictment also indicates that sh33m was used to pay a loan for Mawanda and Mudimi.

The accused were committed to the Anti-Corruption Division of the High Court to face trial. (Credit: Alfred Ochwo)

Mudimi is also accused of using sh865.9m cooperative cash to settle his outstanding loan payable to Jain Rajnish.

Court documents indicate that lawyer Kirya allegedly used to settle the debts on behalf of Mawanda.

In addition to debt payment, sh85m was purportedly paid to Mudimi’s account in dfcu Bank Jinja Road branch.

MPs Mawanda ((Igara East) and Mudimi ((Elgon County) are battling corruption charges related to sh3.8b Cooperative funding scheme alongside Paul Akamba (Busiki County), trade ministry’s permanent secretary, Geraldine Busuulwa Ssali, Leonard Kavundira (the principal co-operative officer at the trade ministry), and lawyer Julius Kirya.

The accused were committed to the Anti-Corruption Division of the High Court to face trial.

Prosecution team say they will adduce evidence to prove that the action of distributing money by Kirya to Mawanda and Mudimi amounted to money laundering.  

The prosecution further alleges that sh200m was transferred to the bank account held by Akamba in dfcu on June 14, 2023.

MPs Mawanda ((Igara East) and Mudimi ((Elgon County) are battling corruption charges related to sh3.8b Cooperative funding scheme alongside Paul Akamba (Busiki County), trade ministry’s permanent secretary, Geraldine Busuulwa Ssali, Leonard Kavundira (the principal co-operative officer at the trade ministry), and lawyer Julius Kirya. (New Vision/Files)

According to the indictment, Kavundira purportedly influenced and coerced the Chairperson of Buyaka Growers Cooperative Society to abandon their duly appointed advocates, Anguria and Company Advocates, and Mungoma and Wakhakha and Company Advocates in favour of Kirya and Company Advocates for purposes of following up their claim of war loss in the trade ministry.

Prosecution asserts that Kavundira being a member of the verification committee, which was a parallel committee created by Ssali had prior knowledge of the claim and what was due to Buyaka Growers Cooperative Society.

Ssali is accused of approving payments to Kirya and Company Advocates contrary to the Treasury Instructions 2017.

The prosecution also claims that Ssali established a parallel verification committee contrary to the inter-ministerial committee that had been created by Cabinet for purposes of expediting the impugned verifications of various cooperatives for her personal interests.

Ssali is also accused of irregularly making payments to Buyaka Growers Cooperative Society without supporting documents.

Ssali is battling charges of abuse of office, causing financial loss under the Anti Corruption Act sections 11 and 19, respectively and conspiracy to defraud under section 309 of the Penal Code Act. (New Vision/Files)

Charges

Ssali is battling charges of abuse of office, causing financial loss under the Anti Corruption Act sections 11 and 19, respectively and conspiracy to defraud under section 309 of the Penal Code Act.

These charges carry significant penalties upon conviction: causing financial loss can result in up to 14 years in prison, abuse of office up to seven years and conspiracy to defraud up to three years.

The three legislators face charges of diversion of public resources and receiving stolen property while lawyer Kirya is battling charges of diversion of public resources, stealing by agent and money laundering. On the other hand, Kavundira also faces charges of abuse of office.

Allegations

Prosecution alleges that Ssali, during the financial year 2021/2022, in abuse of her authority, irregularly introduced Buyaka Growers Cooperative Society Limited among the cooperatives to be compensated for the war loss by the Government, which was not listed on the request for the supplementary budget dated August 4, 2021.

According to the prosecution, the arbitrary act is prejudicial to her employer (trade ministry).

It is further alleged that Ssali, during the financial year 2021/2022 and 2022/2023, made payments to Kirya and Company Advocates amounting to sh3.8b meant for Buyaka Growers Cooperative Society in contravention of the treasury instructions of 2017.

Prosecution added that she did this knowing or having reason to believe that such an act will cause financial loss to the Government.

It is alleged that Ssali, together with the five accused persons and others still at large, between 2019 and 2023, conspired to defraud the Government of sh3.4b, which was intended for war loss compensation meant for Buyaka Growers Cooperative Society.

Background

Court documents indicate that during the liberation war of 1981 to 1986 and the insurgencies that prevailed in some parts of the country, some cooperative operations and assets were adversely affected.

It was on that basis that various cooperatives including Buyaka Growers Cooperative Society lodged their claims for compensation with the Government.

On May 8, 2020, Buyaka Growers Cooperative Society lodged a claim of sh17.3b with the trade ministry.

The three legislators face charges of diversion of public resources and receiving stolen property while lawyer Kirya is battling charges of diversion of public resources, stealing by agent and money laundering. On the other hand, Kavundira also faces charges of abuse of office. (New Vision/Files)

Subsequently,  the Government through a Cabinet Memo established the inter-ministerial verification committee charged with verification of the war loss claims by various cooperatives.

Accordingly, the verification committee conducted an assessment exercise on Buyaka Growers Cooperative Society and established the loss incurred by the cooperative to be worth sh5.4b.

On August 4, 2021, the trade ministry permanent secretary wrote to the finance ministry secretary of the treasurer requesting a supplementary budget of sh54.5b that included sh10b for war loss compensation to cooperatives that were in Masaka sh2.4b; Teso sh1b; Nyakatonzi sh1.1b; North Bukedi sh1.2b; Bunyoro sh1.5b; Lango sh723.6m; Kigezi sh1b and Central West Nile sh1.2b.   

According to prosecution, Buyaka Growers Cooperative Society was not among the cooperative societies listed in the said request yet it was earmarked to benefit sh1.5b.

Subsequently, on October 21, 2021, the finance minister wrote to the speaker of parliament submitting a supplementary expenditure schedule for the financial year 2021/2022 which included payment of sh8b to the trade ministry for cooperatives war loss compensation.

But the Parliament Budget Committee introduced and recommended an appropriation of sh17.5b to the trade ministry for compensation of various cooperatives without any basis or justification, according to prosecution.

However, prosecution says the cooperatives which were intended to benefit from the approved sh17.5b did not include Buyaka Growers Cooperative Society.

Parliament finding

On August 25, last year, the sectoral committee on tourism, trade and industry received instructions from the Speaker of Parliament, Anita Among, to conduct an inquiry into the status, governance, resourcing and value for money for public funds allocated to Cooperatives during financial years 2011/2012-2022/2023.

The committee, headed by Mwine Mpaka (Mbarara City South) submitted its report to Parliament in October last year, where it implicated several legislators, lawyers and cooperative society boards in the mismanagement of the funds.

The Speaker submitted the report to the relevant government agencies, which included the Criminal Investigations Directorate, Office of the DPP and the Inspectorate General of Government for investigation.

Buyaka Co-operative Society was registered in 1949. The cooperative first executed a memorandum of understanding between the Society and M/S. E. Angura and Company Advocates, on March 6, 2020, the law firm was to be paid a consideration of 5% of the value of the compensation money from the Government for legal representation and consultancy work.

However, the committee observed that this communication was never received by the trade minister.

The committee expressed concern and questioned why the cooperative society appointed another law firm; M/S Mungoma, Mabonga, Wakhaka and Company Advocates to carry out the same task.

The committee was informed by the chairperson of the cooperative society that an officer from the trade ministry (Kavundira) advised them to get another lawyer.

Kavundira reportedly introduced Kirya and Company Advocates, who he said would be in position to pursue their claim from the ministry.