By Max Patrick Ocaido
PARLIAMENT. Government is again in search of a new investor to recapitalize Uganda Telecom Limited (UTL) after the first company-Teleology failed to raise money to pay the accrued debts.
State minister for Privatization, Evelyn Anite on Thursday told Parliament that the Ministry of Finance has opened up fresh bids in search for a new investor to help government run crippling UTL 2years after the telecom company became financially distressed, technically insolvent and was put under administration with Bemanya Twebaze as the receiver-manager.
Anite was prompted to respond to the current operations of UTL after MPs demanded an audit on UTL following reports that it has failed to adhere to rules and regulations of Uganda Communication Commission.
“According to the terms, the investor-Teleology was supposed to have paid the debts in the first 3 months, but they did not do so. So it was a white elephant; Teleology did not have the money to invest in UTL. Now we have gone back to the drawing board to invite new investors, unfortunately, we don’t know the status of this company-UTL,” Anite said.
Minister Anite added that the ministry has no records of accountability on the operations of UTL or even how much the company is making after UTL administrator [Bemanya] blocked Ministry of Finance from accessing its records for auditing through internal auditors. She adds that the Auditor General and Attorney General have failed to offer guidance for auditing UTL on grounds that “it is a court led process.”
“We wrote to the Auditor General to audit UTL administration, but he said he is unable to audit UTL. Since UTL is under Finance ministry, we decided to get internal auditors to audit the company, but the administrator said he cannot allow any internal auditors to audit them and that they can only account to Court. We wrote to the Attorney General who asked for more time to study the law on if or not we can audit the company,” Anite said.
“Whereas the process to recapitalize UTL is ongoing, we cannot go to UTL to find out what is happening, we do not know how much money the company is making and indeed Finance ministry is concerned and the country is right to be concerned.”
In May 2018, Financial Intelligence Authority (FIA) recommended to Finance ministry to consider Mauritius Telecom Company as the best option available to recapitalize UTL despite offering the lowest assets of $45m because the mentioned company was “a financially stable company with credible shareholders whose funding sources are clearly known.” 33.5% shares of Mauritius Telecom belong to the government of Mauritius.
However, UTL administrator-Bemanya opposed the FIA report and duped cabinet to believe that Teleology Company was the best option because they offered the highest assets of $60.5m despite having no experience with a weak financial muscle. It is not a surprise that Teleology Company failed to deliver on inception.
It should be noted that the Government of Uganda represented by the Minister of Finance, Planning and Economic Development (MoFPED) and UCom are 31% and 69% shareholders respectively in UTL. To avoid liquidating the company, government in May 2017, appointed Bemanya as receiver-manager of UTL.
According to a Cabinet Memorandum CT (2018) paper titled “Update on the status of sourcing a strategic partner for Uganda Telecom Limited”, UTL’s total liability was $147m (Over Shs550bn).