Shelter Afrique MD James Mugerwa accused of profligacy

Shelter Afrique managing director James Mugerwa. PHOTO | FILE 

By ALLAN OLINGO

In Summary

• Documents seen by The EastAfrican show that Mr Mugerwa had incurred bills of $3,740 and $3,325 on his two mobile phone lines in two weeks.
• Mugerwa, a Ugandan national who was tapped from GE Capital Italy in 2014, is also accused of forcing the staff to purchase for him eight smartphones in six months. Leaked documents show that the phones, including iPhones and high-end Samsungs, cost close to $6,000.
• Mugerwa is also accused of making double per diem claims while on foreign trips, and arbitrarily sacking junior staff who questioned it.

In May last year, Shelter Afrique finance director Godfrey Waweru flagged a telephone bill of $7,391 incurred by the company’s managing director James Mugerwa the previous month.

Documents seen by The EastAfrican show that Mr Mugerwa had incurred bills of $3,740 and $3,325 on his two mobile phone lines in two weeks, when he was attending the annual general meeting in Abidjan, Cote d'Ivoire, and later while on travel to Ghana.

These bills highlight the profligacy of the lender’s senior management.

Mr Waweru alleges that the managing director directed him to negotiate the application of the International Financial Reporting Standards with the external auditors in order to reduce the impact of applying these standards on the reported net income.

“This was the case with the retirement benefits liability provision, loan impairment provision and impairments on funds deposited with the collapsed Chase Bank during the audit of the 2015 financial results,” an e-mail written to the lender’s board by Mr Waweru reads.

READ: Shelter Afrique sets aside $8m to cover loss from Chase Bank deposits

Mr Mugerwa, a Ugandan national who was tapped from GE Capital Italy in 2014, is also accused of forcing the staff to purchase for him eight smartphones in six months. Leaked documents show that the phones, including iPhones and high-end Samsungs, cost close to $6,000.

Again, Shelter Afrique allegedly spent $360,000 to renovate the MD’s official residence and furnished it for $32,153, but he only moved in briefly and moved out to a rented unit that costs $5,500 monthly.

The lender’s head of compliance, risk and legal Vipya Harawa, however, says that the renovations and the MD’s rental decisions were approved by the board.

“It is unfortunate that we ended up spending all these amounts without really doing due diligence because, once the managing director moved in, he informed the board about the structural inefficiencies of the house and the board approved his exit,” Mr Harawa said.

Double per diem

Prior to moving in, the lender had spent $3,800 monthly on a rented apartment for the managing director for more than six months. They spent a further $2,306 in repairs and maintenance in the new residence.

Mr Mugerwa is also accused of making double per diem claims while on foreign trips, and arbitrarily sacking junior staff who questioned it.

Wendy Kirui, a former administration officer, says her employment was terminated in March this year for allegedly failing to pay on time the December 2015 electricity bills at the managing director’s house amounting to $1,270.

“We had a property manager under whom this function fell. We had hired Gimco Property Managers, under whom the function of processing the payments for electricity, water and sewerage bills fell. But they terminated my employment for ‘embarrassing’ the organisation. They promised to pay my dues, which they haven’t,” Ms Kirui told The EastAfrican.