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Funds to Karim hotel blocked

By Vision Reporter

Added 31st October 2007 03:00 AM

The Auditor General has rejected a request from the Ministry of Finance to pay sh4.8b for two CHOGM hotels.

The Auditor General has rejected a request from the Ministry of Finance to pay sh4.8b for two CHOGM hotels.

By Mary Karugaba

The Auditor General has rejected a request from the Ministry of Finance to pay sh4.8b for two CHOGM hotels.

Finance State minister Jachan Omach had asked for sh2.1b for Imperial Royale Hotel, the venue for the media centre, owned by business tycoon Hirji Karim, and sh2.6b for J&M Airport Road Hotel in Entebbe.

According to the minister, the Government would later turn the money invested in the two hotels into shares, like it had done with the Commonwealth Resort in Munyonyo.

But the Auditor General, John Muwanga, told the ministry to first seek approval from Parliament. Releasing the money without parliamentary approval was illegal, he noted.

“The nature of the expenditure is to provide equity funding to two private hotels,” Muwanga wrote to the finance ministry.

“Parliament has through the Public Accounts Committee directed that no further investment or granting of loans to private enterprises be entered into by the Government without the approval of Parliament.”

He said if unauthorised, the expenditure would constitute loss of public money.

He concluded: “I am unable to issue a grant of credit for this due to the fact that I do not have powers to approve the release of funds to private companies.”

Earlier, Omach had appealed to the Auditor General to approve the release since it was cleared by the Solicitor General.

“In view of the clearance of the Solicitor General’s office of the co-investment and given the urgency and following a presidential directive, I am of the view that you can clear this expenditure as soon as possible to enable us have these hotels ready for CHOGM,” Omach wrote on October 24.

In a recent report to Parliament, the Auditor General noted with concern that his office had no power to audit private companies where the Government was a minority shareholder.

Funds to Karim hotel blocked

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