UIA, Bugisu Co-operative Union trapped in sh3b botched land deal

Mary Karugaba and Lydia Nabwire

Uganda Investment Authority is at risk of losing sh3b in a botched land deal in Mbale town.

According to documents, questions were raised after the management of BCU under the chairmanship of Nathan Nandala Mafabi raised a red flag over the irregular sale of the land measuring 619 acres in Mbale Town at sh3b.

Established in 1954, BCU is one of Uganda's few surviving co-operative societies owned by coffee farmers who are organized in primary societies.

According to Mafabi, the sale was not approved by the Union's annual general meeting as required by the law and that UIA signed an agreement of sale with a non-existing Board that had already been dissolved by the then Ministry of Trade, Tourism and Industry due to mismanagement.

"The Minister of Tourism, Trade and Industry suspended the board of the Union from Office with effect from April2, 2008 who signed the sales agreement on April,15 2018. The purpose of this letter is to seek your guidance whether the suspended board had the mandate to sale," he wrote.

He also argued that the land was sold at sh3b yet the same land had been valued at sh72b in 1998.

A sales agreement between BCU and UIA signed by the then Executive Director Maggie Kigozi and the Union chairman Stephen Wakyaya on April 15, 2008 indicate that the land was sold at sh3b.

In March2018, the Permanent Secretary to the Ministry of Trade, Industry and Co-operatives Ambassador Julius Onen in response to Mafabi's complaints, agreed that the sale was irregular since the board was not in existence and there was no record of the annual general meeting or approval over the sale of this land.

Documents seen by New Vision show that the sale agreement was signed on April15, 2008 yet the Board was resolved on April10, 2008. 

"The Board of BCU was dissolved on April10, 2008. Therefore the board was not in existence when the sales agreement was signed. The Secretary, Manager, deputy manager and the accountant were suspended from office and therefore were no longer in office to transact any business. We have no record of the AGM resolution or approval over the sale of this land," Onen wrote.

The deal has also attracted the attention of the Minister of Finance Matia Kasaija who asked the Attorney General seeking advice on the matter.

Pointing out the issues raised by Mafabi, the minister wrote, "We seek your opinion so that this matter can be settled amicably to allow investments go on."

In addition, Kasaija said BCU claims to have lost money when government was running the entity. "We seek your opinion and advice on compensation of the claimed loss of cash and assets during the time government was in charge."

In  a separate communication, Mafabi  in a letter dated November 2, 2017 to the Attorney General, wondered whether the board had the authority to sale the Union's land under the law.

Mafabi also complains that UIA paid sh3b in 2008, yet the land had been valued at sh72b in 1998.  He argued that the contested land is located in a prime area where an acre now goes for more than sh100m.

Government in April 2008 suspended BCU board of directors to pave way for a forensic audit of the Union after reports of mismanagement emerged. The Ministry commissioned forensic audit for the period 1996 to 2010 which was completed in December 2013.

While the board was on suspension, government appointed William Wepukhulu as a caretaker, managing it under the supervision of the commissioner of Co-operatives.

On April10, 2008, the Registrar for Co-operatives in the Ministry of Trade, Tourism and Industry F. Mwesigye, dissolved the Board to pave way for investigations into the affairs of the Union.

"All the board members are required to immediately hand over all Union property in their custody to William Wepukhulu the caretaker manager. This must not go beyond Friday April11, 2008," he said.

Despite the deadline for handover of BCU assets, three days later on April 15, 2008, Wakyaya signed the sale and purchase agreement on behalf of BCU.