Katto Ready To Supply The Overhauled Helicopters

Jun 01, 2001

Ssebutinde: Before we begin, we wish to make two announcements. Next week on Wednesday, the 6th of June, we have the honour of interviewing the President. The secretary to the Commission (Robinah Rwakoojo) will give you details

The Commission has summoned Emmanuel Katto and another witness, Lawrence Kawuma. Katto's lawyer, Bob Kasango is present. Justice Julia Ssebutinde heads the panel. Anne Mugisa and Milton Olupot covered the hearing. Ssebutinde: Before we begin, we wish to make two announcements. Next week on Wednesday, the 6th of June, we have the honour of interviewing the President. The secretary to the Commission (Robinah Rwakoojo) will give you details Robinah: Hearing will be at State House Nakasero. The press should report there at 10.30 am. The proceedings will start at 11.00am. Newspapers will be represented by two journalists each and the TV will be represented by three journalists each. Ssebutinde: It will be a public inquiry and UTV will cover live for those who will not be able to come to State House. The President has said he will be there for as long as the Commission wants him. The second announcement is for Mr Emmanuel Katto. The Commission got evidence from abroad from various witnesses that directly affects this proceedings. We got this evidence this morning and haven't been able to go through it. We will peruse it and then avail you a copy so that you can answer some of the issues. Another thing is I heard, you are declining to appear and have returned summons to the Commission. The summons for next week summons. Katto: It is not true. Ssebutinde: When we heard it we were concerned because we thought we could give you a chance to give your side of the issue. We will avail you the evidence... Katto: Much obliged but I didn't know where you got this. Ssebutinde: I was told.... He served you for June 9 and you said you won't be around for one reason or another..... Katto: It is not true.... Ssebutinde: As you know the way we operate we do not force people though we have the powers to. We give people a chance and if you do not want, we take the evidence at face value. Katto: May I ask that I'm given a chance to answer to allegations I read in the media about me. The headlines were....These are very serious allegations. I looked through the file in your office and didn't see any indication that I would be given chance. I wish I would be given a chance to challenge it...It puts me in a precarious situation. I wish some one who said it would appear here and face you..... Ssebutinde: In regard to the headlines, I would like to repeat what I said that the Commission has no control of what is to be published by the press....I remember yesterday saying that the Commission had received information that we are yet to establish and we are in the process of doing that. The information was that Consolidated Sales Corporation (CSC) and its partners were supplying arms and information to LRA. Certain names were mentioned which I will not give ...and that information will come to you. That is why we want you to return. The information came from abroad....We VERIFIED the information with your own evidence...You kept telling the Commission that you had no knowledge of many things in the deal. So you left a lot of things in the hands of Chris Smith and Max Waterman and the information seems credible in that .... While you were not there and aware, these people were providing copies of the contract and schedules to the LRA.....They are not willing to come here for obvious reasons...we shall pass the information to you in good time so that you can assimilate it....We saw there was a very big likelihood that.... It seems corroborated. We will give you a chance.(turns to Owor) We can proceed. Owor: (introduces the next witness number 38, Lawrence Kawuma. ) Owor: What do you do? Kawuma: I'm a former employee of ICB. Now I'm jobless. Owor: What did you do in ICB? Kawuma: I used to be a copy typist in ICB. Owor: When did you start work? Kawuma: In 1991 to the close of the bank in September 1998. Owor: What are your qualifications? Kawuma: Aah, aah, anyway (gestures) anyway, mmmh...let me say I'm J2 (junior two) Owor: What other qualifications do you have? Kawuma: (hesitates. Then Owor guides him before he answers) Typing certificate from Pillahi High School. Owor: When did you get the typing certificate? Kawuma: In 1963. Owor: Have you ever handled CSC...? Kawuma: yes. I got a call from Mr Emmanuel Katto in April 1997. So when he called me, he told me to assist him and register a certain company. He gave me the memorandum and Articles of Association. I was in the bank and he was in his office on Uganda House Kampala road...So he gave me the memorandum and articles of association. I took it to the registrar of companies for registration... Owor: who did you speak to? Kawuma: I went to the general office to Mr Kalema. Owor: What was Kalema's position? Kawuma: a clerk in the general office...kalema told me the registration fee which is US$250. He also told me that for the company to be registered, it needed forms to accompany it. They were about five sets. The forms should indicate the directors abroad and the local ones here. The forms were to be bought from Uganda bookshops. I went back to Mr Katto's office. I was told he had gone abroad. Ssebutinde: Had you paid the fees? Kawuma: Yes. Ssebutinde: Did you get the receipt? Kawuma: No. he gave me the receipt later... Owor: Who told you he'd gone abroad? Kawuma: His manager. Owor: What is his name? Kawuma: We used to call him Godfrey. Owor: When did Katto return? Kawuma: I can't recall well, but he took sometime and by that time I was waiting for him to give me instructions to register his company. I did not get more instructions. That is where I stopped. Owor: You told the judge you gave the money to Kalema. Kawuma: Yes. I returned to Mr Katto and he wasn't there. I went back to Kalema to collect the receipts because Mr Katto was not in office... Owor: Was a file opened? Kawuma: I think Kalema could have opened a temporary file pending the records to register. Owor: Were you there when he opened a temporary file? Kawuma: No. Owor: How did you know he opened a temporary file? Kawuma: because I had given him the money. So I thought he had opened a file. Owor: Did he give you a copy to the memorandum and articles of association? Kawuma: It was only one copy, which I left with the registry of.... Owor: Did he show you the memorandum and the articles when you went for the receipt? Kawuma: No. He said when I bring back the forms, then they would process the registration. Owor: Do you know if it was registered? Kawuma: No. That is where I stopped. Owor: That is all I have for this witness. Kiryabwire: Where is this receipt? Owor: I kept it in our office at the bank. I kept it in the forex department. Kiryabwire: Why in that department? Kawuma: This regarded foreign currency. Kiryabwire: I don't understand it. explain please. Kawuma: I kept it in my custody in a safe place...then the bank closed. Ssebutinde: The bank closed in September, you got the receipt in April, you mean all that time, six months, you never saw Mr Katto. Kawuma: I waited for instructions. Ssebutinde: That was Mr Katto's receipt not yours. You have proof that you paid in the money? Kawuma: eeh, eeh (breathes heavily.) Ssebutinde: Where is proof that you paid that money. How do we know you didn't "eat it"? Kawuma: (silent, He shifts uneasily. Looks at the judge. Makes like he wants to speak, but doesn't, keeps gesturing with his hand, palm up. There is laughter from the audience, then softly says.) when you take they rubber stamp it. Kiryabwire: That is fine. We want the receipt. Ssebutinde: (Asks Kawuma for his identification including tax tickets. Kawuma shuffles for them in his pockets and hands them over. Sebutinde and Kiryabwire study them.) We are convinced you are Lawrence Kawuma, but we are not convinced you paid the money to the registrar. Ssebutinde: (To Katto) Is CSC registered locally? Katto: From that, it is not. Ssebutinde: How did it find itself on the Company register? Katto: I don't know. Ssebutinde: When did you conduct business when it was not registered. That is illegal Katto: I knew it was operating like an international company. Ssebutinde: You were supposed to register and not to incorporate it....and why did you send Kawuma? Katto: I believe it was registered until this Commission asked me...It was an oversight. Ssebutinde: whose obligation was it to register it? Katto: The company's. Ssebutinde: The company does not have arms and a brain... Katto: the directors. Ssebutinde: Did you ever demand for your receipt from him (Kawuma)? Katto: No. Ssebutinde: Did you demand the registration certificate? Katto: You said it needed not be incorporated here. Ssebutinde: I said a registration certificate, not an incorporation certificate. Katto: It was an oversight my lord. Ssebutinde: (Turns to Owor) May be we can start with today's evidence. Owor: The last time we talked about the remittances of money....you gave us your remittances, but will start with ours (documents)...Document from the liquidators (Katto gets it. Owor tells him to read. He reads and there are nine different remittances, one for US$2,590,916,891, three of US$519,538,145 each and five of US$523,687,386 each. They totalled sh6,767,979,506, an equivalent of US$5,240,385.) is this a fair statement by the liquidators? Katto: Yeah. I think it is fair. Owor: Okay let us see the details of the remittances. ICB was making the remittances ... Katto: Excuse me. My document has eight promissory notes. Yours has nine. (Ssebutinde shows Katto that they are looking at the same document.) Owor: Who was the beneficiary? Katto: CSC. Owor: (tells him to read them. Reads US$100,000 and Gold Trust Bank was the beneficiary. It was channeled through Citibank, New York.) Ssebutinde: Throw some light on how Gold Trust came to receive the money? Katto: This was a different transaction. Ssebutinde: How? Katto: It was a transaction not connected to the matter in the Commission today. Ssebutinde: Really? Owor: Throw some light on it. Katto: The account was not used for the helicopters deal only. Owor: Tell the Commission what transaction it was. Katto: It was to Kasirye, Byaruhanga and company advocates. Ssebutinde: For what? Katto: For the purchase of some property on Jinja road. Ssebutinde: What was that property? Katto: It belonged to Marples Alandis...It was bought by me through Kasirye, Byaruhanga and company advocates. Ssebutinde: But you see it was in the remittances of... Owor: Next? Katto: (Reads US$300,000 to CSC account in a British bank BBK, another of US$451,300 via a Bank in Vienna and says it is for BT, the company where the controversial helicopters were bought.) Ssebutinde: I'm not convinced the beneficiary was BT. Here it says CSC and an account in Austria. That word is not BT. Katto: The beneficiary is not CSC, if it is not BT then it is Triton SAL, I believe. (He reads another remittance of US$308,440 to BT through a Vienna bank. He reads 19 other remittances ranging from US$100,000 to US$700,000. CSC was shown as the beneficiary of most of the remittances, except for US$308,440 which went to BT. One of them was of US$150,000 but there was no information where it went.) Owor: can you supply the Commission with information about it? Katto: I can't until I check my... Owor: The largest amount of the remittances goes to CSC yo can only conform US$308,440 going to BT and ...Triton SAL. Katto: we did not have connection with BT. We went through Triton SAL then they would pay BT. Katto: How much did you send to BT and Triton SAL?, US405,300 and US$308,440. Ssebutinde: Why did you send the money to Triton SAL when you said you had no direct link? Katto: I said through... (Katto is told to calculate what Triton SAL got in total. Then asks judge.) You wouldn't happen to have a calculator? Ssebutinde: Yes I would. (She gives Katto the calculator and he calculates) Katto: US$3,443,060 went to TNT. Ssebutinde: Add that to the direct remittances... Katto: US$4,202,800. (Katto also said that Almavile got US$831,643.) Owor: What for? Katto: Some of the payments were requested through Almavile. (He wants it added to the Triton SAL amount. The Commission demands for proof it went there. He said it was supposed to be commissions for the Belarussian Generals. He cannot bring proof.) (Emmanuel Katto returns after lunch.) Owor: There is a letter here from you to the Permanent Secretary Ministry of Defence, informing him that the remaining two helicopters had been overhauled and were ready for inspection. Where were the helicopters and in what state? Katto: May I establish... Ssebutinde: Let the witness first tell us about the two choppers then we can go to documentation. Katto: After the delivery of the first two helicopters, CSC was informed by the PS Dr. Mbonye that these helicopters were not overhauled. We challenged this because to our understanding they were overhauled, we challenged him for evidence that the choppers were not overhauled and he said the Airforce experts had proved that they were not overhauled so we agreed for an independent assessor...during this time Mr. Chris Smith fled and did not tell me that he was going and I was not experienced in sourcing for helicopters. We eventually agreed on Heyenes Helicopters SA as independent assessors to inspect the helicopters... at this stage it was made clear to us that we had to overhaul the other remaining choppers in order to salvage the contract the ministry would allow us complete the contract and overhaul the delivered helicopters as well. My co-directors informed me that the two remaining choppers had been overhauled and were ready for shipping. Ssebutinde: What where were they (Choppers)? Katto: I believe Orsha in Belarus, , but some time it was discovered that they did not exist. Ssebutinde: Who discovered? Katto: We were asked for a document and it was not forthcoming from my co-directors and we actually fell out and I was considering taking legal action against them because I had been cheated. Ssebutinde: What did they say? Katto: They kept on promising. Ssebutinde: Why didn't you go yourself? Katto: I did not have direct connection to Triton or BT I tried to get in touch with Kopeikin in vain. I realised that without the help of Kopeikin, Smith and Waterman, it was difficult for me to manage. Then I got an offer from Mr. Sharif Elmasir, but Dr. Mbonye told me that the chopper was not for Sharif but for the Rwanda government. So I got in touch with a Russian State Corporation and travelled with the then Maj. Noble Mayombo but some where I realised that Mayombo had put the Russian Embassy in touch with the Corporation and this time they were not interested in dealing with me...therefore he destroyed for me the deal that I had put together. Owor: How did you get to know this? Katto: I was told in a meeting that since they were now in direct touch with the principal (Ugandan Government), they could not deal with 3rd parties. So I paid Shariff US$150,000 as down payment for brand new engines and brand new gear boxes and he imported these items and put them in the store at the Entebbe Airbase and he offered to bring experts from Kygstan to come and verify the specifications. I did not pay in full because I did not have enough money and I would pay him the later. I had also got an offer from South Africa who wanted to set up an overhauling plant at Entebbe and they would overhaul the helicopters at US$800,000 each. We were, however, shocked when Dr. Mbonye asked us to pay US$2.5m. Dr. Mbonye bought the helicopter that was at Entebbe destined for Rwanda and even the spares I imported and Shariff paid me back US$60,000 instead of the down payment I gave him of US$150,000. I obviously made a loss on that one and I was annoyed. Owor: When you went to Moscow the company asked you for documents that you did not have and that is why their company declined to deal with you. and it also turned out that you were not invited for preshipment inspection but for preliminary negotiations, what do you say about that? Katto: These are businessmen when they got access to the Principal, the middleman is forgotten about. Ssebutinde: When you went to Moscow, were you shown the two helicopters that you had set out to see? Katto: No. Ssebutinde: Where do you stand now on the issue of the remaining two choppers and your contractual obligation? Katto: The negotiations broke down and if the negotiations could be rejuvenated, we are still more than willing to supply these helicopters given the chance we are ready. We were confused by the notice to sue. Ssebutinde: A notice is a notice by the time you got it they were still waiting for you to procure the choppers? Katto: The issue is that Dr. Mbonye was not willing to budge at the cost of US$2.5m, yet we had other agencies that could do it at US$800,000. We still have people who are willing to do this. Ssebutinde: So that is the impasse? Katto: Yes it is the only impasse. Ssebutinde: But is CSC ready to supply the two remaining choppers so long as you agree on the cost of overhaul? Katto: Absolutely. (Dr. Ben Mbonye and Mrs. Ochaya Lakidi also appeared to explain the whereabouts of the certificate of acceptance signed by Col. Dr. Kizza Besigye and handed over to the Ministry. Both denied seeing the certificate. Mbonye clarified that the Russians who stayed at Entebbe for over two years and receiving over US$3,000 per month were employed by the Ministry of Defence and not himself. In another development, Owor read a letter translated from Russian to English, written by the Belarrussian government denouncing a dealer whose address was not clear. The letter which was addressed to the ministry of Defence Uganda expressing a wish to deal directly with Defence said the dealer (unclear) had been banned from Russia because of unbecoming conduct. The letter also said Kopeikin, whose company Triton SAL, through whom Katto's CSC bought the helicopters from Belarus was beyond reproach. But it warned that the Belarussian government did not want to deal with Kopeikin's partner. Ssebutinde: (To Katto) It says that the reputation of Kopiekin is beyond reproach so that rules out Triton SAL. Is this your company that is denounced from Belarus? Katto: (He denied knowledge of the letter and CSC being the one banished) Ssebutinde: We will have this letter better translated then we put the questions to you, Mr Katto. Owor: (Reads another letter in english which shows that the helicopters ownership was transferred to Triton SAL/CSC. The letter was addressed to Mbonye but Katto denied ever seeing it. Ownership, however has never been transferred by CSC to Defence and the latter fears to try and take the helicopters out for overhauling because those holding the ownership certificates can impound them as theirs.) Hearing continues on Wednesday. Ends

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