CHOGM: Hotel turns debt into shares
Feb 11, 2010
THE proprietor of J&M Airport Hotel, Joseph Behakanira, has agreed to turn the Government’s investments in the hotel into shares. Behakanira made the decision yesterday after being grilled by MPs on the public accounts committee for about four hours.
By Mary Karugaba
THE proprietor of J&M Airport Hotel, Joseph Behakanira, has agreed to turn the Government’s investments in the hotel into shares. Behakanira made the decision yesterday after being grilled by MPs on the public accounts committee for about four hours.
The committee is probing the Government’s expenditures during preparations for the Commonwealth Heads of Government Meeting (CHOGM).
On November 15, 2007, just three days to the summit, the Government gave Behakanira $1.3m (about sh2.7b) to complete 200 rooms, hoping that CHOGM guests would stay at the hotel. However, the hotel did not receive any guests.
Behakanira defended himself, saying: “It is not my fault that visitors never came. The rooms were available and ready for use.
“The Ministry of Foreign Affairs kept telling us the guests would come. The rooms remained vacant until CHOGM was over.â€
According to him, the Government hired each room at $200 per night for nine days.
An agreement signed by the Government and the hotel in October 2007, stated that the Government would pay $1.5m for the facilities.
It was also agreed that the investment would be turned into preferential shares after the summit.
According to the Auditor General’s report, J&M was not on the list of approved CHOGM venues and no activity was supposed to have been hosted there.
“In fact, no CHOGM activity was held at the hotel,†the report said, adding that two days before the summit, the hotel had not yet opened for business.
In 2008, the deputy permanent secretary in the finance ministry, Keith Muhakanizi, advised Behakanira to refund the money if he did not want the Government to co-own the hotel.
Behakanira insisted he would not issue the share certificate unless the Government paid the balance of $200,000 (sh400m).
He also argued that if the Government was unable to pay the balance, it should sign another agreement for share certificates amounting to $1.3m.
Behakanira then assured the committee that he would issue share certificates to the Government equivalent to $1.3m within one week.
However, the committee, chaired by Albert Okello Oduman, insisted that the shares should be issued retrospectively to 2007.
He was also handed over to the Criminal Investigations Directorate of parliament to record a statement.
The MPs who questioned Behakanira included committee lead counsel Tom Kazibwe, Theodore Ssekikubo, Peter Mutuluza and Margaret Kiboijana
Behakanira was also accussed of telling the committee lies and being uncooperative.
“We agreed on $1.5m, but the Government gave me only $1.3m. I told them that if you (government) want shares, it changes the agreement to read $1.3m. As a businessman, I could not sign when the money was less by $200,000,†he said.
If Behakanira lives up to his word, the Government would acquire 26,000 shares in the Hotel.
“All government correspondents show that you are adamant, uncooperative and unwilling to either refund the money or give the shares. What right do you have to hold our money?†Oduman asked.
“You are actually a criminal and wanted by CID. If the Government has failed to pay the balance why don’t you just give shares equivalent to the money you received?†Kazibwe asked.
Mathias Nsubuga also wondered why the Government had not signed another agreement. “Why is the Solicitor General afraid? May be there is something they are hiding,†he said as Kazibwe told him to go and read more about the issue.
THE proprietor of J&M Airport Hotel, Joseph Behakanira, has agreed to turn the Government’s investments in the hotel into shares. Behakanira made the decision yesterday after being grilled by MPs on the public accounts committee for about four hours.
The committee is probing the Government’s expenditures during preparations for the Commonwealth Heads of Government Meeting (CHOGM).
On November 15, 2007, just three days to the summit, the Government gave Behakanira $1.3m (about sh2.7b) to complete 200 rooms, hoping that CHOGM guests would stay at the hotel. However, the hotel did not receive any guests.
Behakanira defended himself, saying: “It is not my fault that visitors never came. The rooms were available and ready for use.
“The Ministry of Foreign Affairs kept telling us the guests would come. The rooms remained vacant until CHOGM was over.â€
According to him, the Government hired each room at $200 per night for nine days.
An agreement signed by the Government and the hotel in October 2007, stated that the Government would pay $1.5m for the facilities.
It was also agreed that the investment would be turned into preferential shares after the summit.
According to the Auditor General’s report, J&M was not on the list of approved CHOGM venues and no activity was supposed to have been hosted there.
“In fact, no CHOGM activity was held at the hotel,†the report said, adding that two days before the summit, the hotel had not yet opened for business.
In 2008, the deputy permanent secretary in the finance ministry, Keith Muhakanizi, advised Behakanira to refund the money if he did not want the Government to co-own the hotel.
Behakanira insisted he would not issue the share certificate unless the Government paid the balance of $200,000 (sh400m).
He also argued that if the Government was unable to pay the balance, it should sign another agreement for share certificates amounting to $1.3m.
Behakanira then assured the committee that he would issue share certificates to the Government equivalent to $1.3m within one week.
However, the committee, chaired by Albert Okello Oduman, insisted that the shares should be issued retrospectively to 2007.
He was also handed over to the Criminal Investigations Directorate of parliament to record a statement.
The MPs who questioned Behakanira included committee lead counsel Tom Kazibwe, Theodore Ssekikubo, Peter Mutuluza and Margaret Kiboijana
Behakanira was also accussed of telling the committee lies and being uncooperative.
“We agreed on $1.5m, but the Government gave me only $1.3m. I told them that if you (government) want shares, it changes the agreement to read $1.3m. As a businessman, I could not sign when the money was less by $200,000,†he said.
If Behakanira lives up to his word, the Government would acquire 26,000 shares in the Hotel.
“All government correspondents show that you are adamant, uncooperative and unwilling to either refund the money or give the shares. What right do you have to hold our money?†Oduman asked.
“You are actually a criminal and wanted by CID. If the Government has failed to pay the balance why don’t you just give shares equivalent to the money you received?†Kazibwe asked.
Mathias Nsubuga also wondered why the Government had not signed another agreement. “Why is the Solicitor General afraid? May be there is something they are hiding,†he said as Kazibwe told him to go and read more about the issue.