NSSF Chief Suspended

Jan 24, 2002

Two long-serving National Social Security Fund (NSSF) top executives have been suspended with immediate effect, a move that has shocked the corporation workers.

BY Yunusu Abbey and Richard MutumbaTwo long-serving National Social Security Fund (NSSF) top executives have been suspended with immediate effect, a move that has shocked the corporation workers.Dr. Yoram Barongo, the managing director, and John Baptist Kakooza, the corporation secretary, who both joined NSSF in 1990, were asked to take leave of office yesterday.Sources said the two had reported for normal duty in the morning. They were served with suspension letters, hardly before they settled down.Gender, labour and social development minister Zoe Bakoko-Bakoru signed the letters, which had the same wording. The letters were delivered to Barongo and Kakooza at about 9:00am. Bakoko-Bakoru did not elaborate the reasons for the suspension, leading to a lot of speculation.Dated January 23, Ref: L.E.I. 210/229/01 and headed “Suspension from duty”, the letters read, “In view of the unfavourable affairs surrounding the NSSF and the ever-increasing public outcry, I have decided to suspend you with immediate effect to allow for investigations.“I am directing you to hand over to the deputy corporation secretary (Martin Bandebire) not later than 11:00am on January 24, 2002.”Bakoko-Bakoru said, “By copy of this letter, I am directing the chairman of the board and the permanent secretary of my ministry to witness the handing over and subsequently report to me.”Kakooza told The New Vision yesterday, “I have not been told how I caused unfavourable affairs and public outcry especially when I am handing over sh213b in investments of the fund.” Barongo was unavailable for comment.Some sources said the NSSF management’s opposition to the privatisation of social security fund management could be one of the reasons the two were suspended.“Government officials have also been pressing the NSSF to reveal the amount of money it pays Dr. Joseph Byamugisha for defending the corporation in the Alcon case,” said a source.Alcon lost a contract to build the Workers’ House over irregularities, resulting into the court battle.“Since Byamugisha is rated among the best lawyers in town, it appears there was suspicion in some circles that he was being paid a lot of money as an NSSF counsel,” said the source.Other sources said NSSF officials have been under pressure from political heavyweights to drop the case against Alcon International and settle the matter out of court.“Those pleading for Alcon had wanted NSSF to pay the US$8.8m (about sh15b) as ordered by a retired Ghanaian-born Kenya High Court judge, Edward Torgbor, who presided over the arbitration between the two parties,” said the source.The tribunal sat in Kampala between November 1999 and November 2000.In his March 29, 2001 judgement delivered in the High Court (commercial division) on November 7, 2001, Torgbor, ordered NSSF to pay Alcon $8,858,469.97 for loss of revenue due to the termination of the contract, supplementary claims as well as general damages.The NSSF objected to Torgbor’s ruling and petitioned the High Court to set it aside. Hearing which was slated for January 18, was adjourned to March 11.Justice Stella Arach, who heard the Alcon petition, decided that the two parties go for arbitration. “NSSF’s recent massive investments worth billions of shillings could also have led to the suspension.For instance, the $5m which it invested in the New York Stock Exchange market was queried in higher circles and management was even asked to give an explanation for investing $5m abroad,” added the source. On August 17, 2001, NSSF effected the $5m investment in the New York Stock Exchange market through Hong Kong Shanghai Banking Corporation.“Also recently, NSSF acquired a 3.7-acre piece of land in Kampala at sh2b, a price considered rather inflated,” the source said. The plot, which belonged to Pan World Insurance Company, is on Yusuf Lule, formerly Kitante Road.Udyam House, which NSSF bought from the Mehta Group at sh9.7b, was also said to have been acquired at an inflated price. The Inspector General of Government (IGG) said as much in a report after an investigation into the deal.NSSF management had been awaiting the board’s approval for about sh4b budgeted for the Udyam House renovation.This week’s board meeting which was called off at the last minute, was due to decide whether NSSF should buy a new multi-storeyed building in Kampala valued at about $10m (sh15.4b).On December 15, 2001, The New Vision in an investigative story, broke the news about NSSF’s plan to the buy Simbamanyo House.NSSF’s other investments, which have been queried, include the planned construction of a $10m twin-tower on plot 17 Lumumba Avenue, Nakasero, earmarked for its headquarters. KCC had already approved the building plan for the twin-tower, which was also to be rented out for commercial purposes.On August 28,2000, NSSF lent National Housing and Construction Corporation $4m at a 9% interest rate to renovate Crested Towers.Ends

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