Once a wanted man, Mugoya gets sh21.6b from NSSF

Apr 19, 2017

NSSF signed a botched $225m deal with James Isabirye Mugoya in July 2004

James Isabirye Mugoya of Mugoya Estates was once a wanted man over the botched Nsimbe Estates project, but he is now a happy man after getting paid sh21.6b in the deal.

This was after the National Social Security Fund (NSSF) bought out Mugoya's 51% interest in Nsimbe Housing Estates in a deal aimed at reviving the project that had stalled 13 years ago.

This implies that NSSF now owns 100% shareholding (830.68 acres) of land situated at Nsimbe and Seeta in Mpigi, 21km along the Kampala-Masaka highway.

In February 2007, the then Buganda Road chief magistrate, Margaret Tibulya, issued arrest warrants James Isabirye alias Mugoya of Mugoya Estates Limited and two of his co-accused.

Mugoya's co-accused were; former labour minister Zoe Bakoko Bakoru and former NSSF managing director, Leonard Mpuuma, who had on three separate occasions been summoned to answer to charges of causing a financial loss of sh8.2b ($2.46m) to NSSF, but had failed to show up.

Whereas Mpuuma was charged over the scandal, convicted and later granted bail, Bakoru fled to the US where she has lived to date.

On June 17, 2003, a Kenyan-based Ugandan businessman, James Isabirye alias Mugoya applied to NSSF seeking to enter a joint venture with the fund to construct Nsimbe Estates along Masaka road.

NSSF signed a deal with Mugoya on July 17, 2004, for the $225m (sh812.7b) project in which Mugoya's construction company was to put up 5,000 housing units.

Mugoya's contribution was for land valued at sh4b then, giving him 51% shareholding in the project while NSSF's contribution was sh8.2b.

But following an investigation by the Inspector General of Government (IGG) that uncovered a number of anomalies, President Yoweri Museveni stopped the project and directed further investigations into the deal. 

The Fund's board led by Onegi Obel and top management led by Managing Director Leonard Mpuuma was suspended.

In September 2004, President Museveni ordered that NSSF be transferred from the Ministry of Gender, Labour and Social Development to the Ministry of Finance, Planning and Economic Development over corruption, especially the botched Nsimbe housing project.

It was until 2012 that the NSSF started making efforts to redeem the project and the deal materialized following a mediation agreement in the High Court's Commercial Division between the Fund and Mugoya dated September 13, 2016.

In a statement signed by NSSF executive director, Richard Byarugaba, stated; "the development is as a result of a protracted effort by the Fund since 2012 to redeem the Fund's initial sh8.2b investment in Nsimbe holdings Limited, made in 2004, that had been written off, and converted the Fund's 49% shareholding in Nsimbe Estates Limited into land, an asset that the Fund could develop in future."

Byarugaba noted that NSSF had acquired 423.6 acres worth sh21.6b, a figure informed by the chief government valuer, and that the land titles have since been transferred into the name of NSSF.

"Going forward, the Fund has initiated a process to finally realise the establishment of a low cost housing estate in the next five years," Byarugaba said in statement released yesterday.

The transaction allows the Fund to recover its initial investment of sh8.2b (49% shareholding) in Nsimbe Holdings that had been written off, which according to Byarugaba means the Fund has made a 132% gain on its initial investment - going by the current market trend. 

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