NSSF ready for ombudsman investigation, says director

 

A section of the Pension Towers currently under construction. Some stakeholders say the Fund is investing in unviable ventures. Photo BY RACHEL MABALA. 

 By Ismail Musa Ladu

In Summary

Mr Byarugaba says the report submitted by a whistleblower to the IGG contains a number of “ unsubstantiated and false allegations aimed at soiling the image that the Fund has since built.”

Kampala

The National Social Security Fund Managing Director, Mr Richard Byarugaba cannot wait for the ombudsman investigation into claims that the Fund is engaged in corrupt and fraudulent transactions.

According to Mr Byarugaba, the report submitted by a whistleblower to the Inspector General of Government (IGG) contains a number of “ unsubstantiated and false allegations aimed at soiling the image that the Fund has since built.”

“The Fund is open to any investigation by the IGG,” said Mr Byarugaba who throughout a recent news conference struggled to keep his emotion under check. He continued: “We will provide the required information to enable the IGG carry out investigations. We commit, in line with transparency and accountability, to cooperate with the IGG to conclusively investigate the allegations.”

The Daily Monitor Friday reported that the IGG had opened investigations into National Social Security Fund and several top managers over allegations of fraud and corruption involving 24 deals. Although Mr Byarugaba said the Fund is yet to be contacted by the ombudsman over the matter, he said he suspects that the author of the whistleblower’s report could be a former disgruntled staff laid off due to performance related issues.

Responding on the Fund’s move to purchase 131.5m shares in Umeme, he said the investment was undertaken in line with the Fund’s investment procedures.

“Investment approved”
“The investment was approved at all levels of authority from management up to the Minister of Finance, Planning and Economic Development. Currently, Umeme is trading at Shs315, up 14.5 per cent from the listing price,” he said. And with all the Fund’s trades in the secondary market executed at Shs275, the Fund’s average purchase price inclusive of trading fees is only Shs276—meaning that value of the investment has appreciated by Shs5 billion in less than 6 months, says NSSF.

On disposal of Namirembe land, a press statement issued by the Fund said the land was purchased in 2008 at Shs650m, together with other plots in Ndeeba, Arua, Gulu, Hoima, Mbarara and Masaka. The Fund says the idea was to build branch offices countrywide but it later resolved to dispose of all the plots as they were idle assets tying up money that would otherwise be earning income. This resolution was adopted and approved by the Board of Directors.

It further said the Namirembe land in question had no access road. “The impaired value on account of lack of access road has now been confirmed by the Chief Government Valuer,” reads the statement.
It adds that the land sale was authorised by PPDA, Contracts Committee, Accounting Officer and the Solicitor General.

 

Responding to Joint Venture with SBI for planned housing estate at Lubowa, Mr Byarugaba said the Fund purchased more than 563 acres of land at Lubowa, Kampala to develop a modern housing estate in 2003.


“And in 2004, a joint venture company Victoria Properties Development Ltd, was formed to implement the housing estate. The joint venture was unfavourable to us (the Fund) because it made SBI a majority shareholder in the company yet NSSF was to provide both the land and cash for the project,” Mr Byarugaba said. After negotiation, SBI agreed to forego its rights under the joint venture agreement in exchange for the design and supervision contract without competition.

These joint venture dissolution terms were approved by the board of directors, Contracts Committee, Management Investments Committee, PPDA, and the Solicitor General paving way for progress on the project.



The $1m loan was to the joint venture, and not SBI and the money was spent by the joint venture company to prepare a master plan for the project.

The guarantee SBI issued for 51 per cent of the loan expired and the joint venture company was wound up. The loan was deemed a sunk cost and written off by the NSSF. Upon dissolution of the JV, the ownership of the master plan was transferred to NSSF, together with all unspent balances on the JV bank account worth approximately Shs40m.