UTL Saga: On Leave, Minister Anite Discreetly Travels to Mauritius

State Minister for Privatization and Investment, Evelyn Anite

The stalemate concerning the demand by State Minister for Privatization and Investment, Evelyn Anite to have the Administrator of insolvent Uganda Telecom Ltd (UTL) removed and the firm audited, is far from over and the Minister is relentless.

In the latest development, reliable sources have disclosed to SoftPower News that Anite who is out the country on leave has secretly traveled to Mauritius. It should be recalled that for long, the Minister has been lobbying for Mauritius telecom as the preferred strategic investor for UTL.

Since June this year, Anite has written several correspondences to pile pressure on the Office of the Attorney General to have the Official Receiver, Bemanya Twebaze removed from his position as Administrator of UTL.

She argues that government has encountered considerable difficulty dealing with the Administrator and has completely lost confidence in his ability to continue to serve the role of UTL Administrator.

In her initial letter to the Attorney General, she said a decision had been taken to remove Bemanya as the current Administrator of UTL and to immediately replace him with an individual that the Ministry will indicate.

As such, she asked the government lawyer to urgently apply to court to replace Bemanya within the context of section 172 of the Insolvency Act, 2011 and the Insolvency Regulations (161 (1)).

But this was objected first by the Deputy Attorney General, Mwesigwa Rukutana and later the Attorney General, William Byaruhanga who warned that interference into the administration of the telecom risks attracting liability to government since it could inhibit sourcing of a viable investor.

While the official narrative the Minister has been pushing is that Bemanya has been non-cooperative with government in getting the telco audited, even when the law is clear that this process must be initiated by one of the creditors through court, the crux of the contention is that he (Bemanya) was opposed to Anite’s preferred investor – Mauritius Telecom.

“It is public knowledge that the Minister had personal interest in the Mauritius state-owned firm and she has been been hell-bent on seeing the firm win the bid,” our impeccable source told this reporter.

It is also alleged that Anite was bankrolled handsomely to see this deal through. ‘Anite’s firm’ had made an offer of USD 40m while Teleology had Shs USD 70m.

Even when basic rules of trading would give preference to the highest bidder, in this case Teleology, Minister Anite insisted government should instead pick Mauritius Telecom. Anite’s choice of the bidder was rejected by Bemanya.

And she has been on record severally stating candidly that her issue with Bemanya stems from the fact that he objected to her choice of investor.

“Out of the 17 companies that expressed interest, 4 returned the bidding documents – Afrinet, Teleology, Hamilton and Mauritius Telecom. And I said these should be subjected to due diligence,” the Minister said in an interview with NBS TV.

“The only company that had audited books of accounts, work experience is Mauritius Telecom”

“My point of departure with the Administrator – his argument was that we should sell this company to the highest bidder. My argument was, you can’t give it to the highest bidder when they (Financial Intelligence Authority) have told you the highest bidder has no financial capability, is not credit worthy and has no work experience. So we disagreed at that point and I was standing for the right thing”.

Since then, the Minister has gone all out to get Bemanya out of the way with hopes of delivering the deal to Mauritius Telecom.

Early last month, this website reported that a team of officials from Mauritius Telecom were in Kampala, at the same time Anite had intensified her campaign in the media to have Bemanya sidelined.

It has now emerged, on credible authority that the Minister arrived in Mauritius on Tuesday after seeking leave from office after which she traveled to the U.S.

In a July 12 letter to the Prime Minister, Minister Anite sought a 15-day leave of her annual leave, that would run from July 16 to August 12. During the period, she said, her schedule of duties would be handled by the State Minister for Planning, David Bahati.

However, in recent weeks, she has continued to personally sign off official documents regarding the UTL saga even when it should be Bahati to do that, which further raises concern about her conflict of interest.

An anonymous (at their request given the sensitivity of the issue) source who confirmed Anite’s covert trip to Mauritius wondered; “Why is she in Mauritius during this crisis? Are her superiors aware of the trip? Could she have gone to meet with Mauritius Telecom? What exactly is the purpose of her visit during this controversy?”

At the moment, an application for an audit of UTL awaits the court decision. At the height of the Bemanya-Anite controversy which later sucked in President Museveni, the Attorney General guided that one of the creditors who is also a government entity applies to court to have an audit undertaken. As such, Uganda Broadcasting Corporation (UBC) applied to court for the same.

As the Office of the Attorney General has advised previously, the attempt by Anite or government through the Auditor General to audit UTL under the circumstances fundamentally goes against principles that govern insolvency. Insolvency implies that an entity (in this case, UTL) has been run down and it is unable to pay its debts.

When this occurs, there are always two solutions – either to place the company under receivership or to liquidate it and sell its assets so as to pay back the creditors. Receivership (Administration) is a process where a third party (in this case Bemanya) steps in to ensure the company is well managed since the assumption is that it was the poor management by those in charge of UTL that led the telco to this position in the first place.

A shareholder cannot order an audit because such an act would cause the creditors to lose confidence since to them, it is this very shareholder that led the company to be broke.

UTL is jointly owned by the Ugandan government and that of Libya (through UCOM Limited). Uganda only has 31 percent shares in the telecom while Libya owns the remaining 69 percent.

The telecom company was placed under receivership in April of 2017 on recommendation of the UTL Board, after the telco suffered rising debts to a tune of Shs 539bn. It had cash flow shortages, capitalization challenges and insolvency petitions were piling. The firm’s creditors were in excess of 100.

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