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SUDHIR/BOU WARS: The Naked Truth Exposed: Falsehoods Sudhir’s Fans Told Vs. Bank Of Uganda’s Kasekende

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L-R: Bagyenda, Sudhir, Edith Kasekende and husband Kasekende

Being the tycoon he is, there is little surprise that Dr. Sudhir Ruparelia has many fans and supporters operating in the social media space. These have nowadays been very active character-assassinating BoU officials they see as being responsible for the collapse of his Crane Bank empire. One of the biggest victims is Dr. Louis Kasekende, his reclusive wife Edith Kasekende and his former BoU workmate Justina Bagyenda. Sudhir’s supporters have uttered many things on social media targeting Dr. Kasekende and his wife who should be less concerned about the husband’s public position. One of the most notorious falsehoods is that Edith was being used as a conduit to coordinate funny deals between the Deputy Governor and some of the law firms BoU hired to prosecute the Sudhir case and to also finalize the sale of CBL and the recovery of USD80m from Sudhir and other CBL shareholders. It has been peddled that Edith Kasekende was dubiously hired to offer HR consultancy services for BOWMANS which is one of the law firms BoU had retained for the Sudhir case.

THE NAKED TRUTH;

The truth as established by Grapevine is as follows; sometime in 2013, BOWMANS suffered severe staff exodus and this was at a time the South African partners were buying into the firm and coming on board to boost its global profile. Many employees were leaving and this scared the South African partners. Price Watershouse Coopers (PWC) which is an HR and audit firm in Kampala was approached and hired to help restore sanity at BOWMANS. Francis Kamulegeya who heads PWC deployed Mrs. Baliddawa to head a team of consultants to help BOWMANS come up with better strategies to ensure staff retention or else the AF Mpanga firm then based at Workers House risked losing the BOWMAN partnership. Mrs. Baliddawa did some work and set up systems and even recruited an HR Manager for BOWMANS. This was a lady called Dorothy from Shell Uganda. She then went ahead with creating strong HR systems to ensure staff retention and talent attraction for the law firm. In her report, Mrs. Baliddawa pointed out why even when they were given instant salary increment, young lawyers still insisted on quitting AF Mpanga. The lawyers still quit even after the crowded Workers House office was abandoned for more spacious DFCU Towers. After sometime, Mrs. Baliddawa quit PWC and went into retirement. She left in place a team of young consultants carrying on the work at AF Mpanga/BOWMANS and this lasted several months for which PWC experts were paid a retainer. Meanwhile Edith Kasekende was also working with PWC and on Mrs. Baliddawa’s recommendation, Francis Kamulegeya deployed her to boost the teams working for BOWMAN to establish strong HR systems. That is how she came to work for AF Mpanga in her own right as an eminent HR practitioner and not as wife of Dr. Kasekende.

BOWMANS WORKING FOR SUDHIR;

By the way, this way before the AF Mpanga/BOWMAN lawyers ever got to be involved in any work relating to Sudhir and BoU. The truth is the law firm only worked for Sudhir during the takeover of Amama Mbabazi’s National Bank of Commerce by CBL. Fred Muwema, representing the NBC owners, used Justice Steven Kavuma to get a strange court order against CBL bosses including the MD Kalan, the DMD and Sudhir himself. He accused them of contempt of court that they went on to take over NBC operations even when there was an order restraining such as issued by Justice Kavuma. There was panic at Crane Chambers and city lawyer Alex Rezida (a director in CBL) recommended that AF Mpanga would handle that Muwema case on behalf of CBL. He led the AF Mpanga lawyers to Crane Chambers late evening and instructions were issued inside Sudhir’s office. The case was worn and the AF Mpanga attorneys moved on. That is the only deal they ever had with Dr. Sudhir who sometime back accused them of conflict of interest. Muwema’s client NBC had brought contempt of court criminal proceedings against both CBL and BoU which was separately represented by MMAKS. Then much later on, the same AF Mpanga came to do some work for BoU as external lawyers after some diplomatically powerful representatives in Kampala got concerned and insisted on AF Mpanga’s inclusion on the team of lawyers to pursue the CBL saga. Justine Bagyenda, the strong Mukiga lady who was at first very uncomfortable with the AF Mpanga law firm on grounds that it had represented Kizza Besigye and other FDC honchos in high profile cases, was instructed to add AF Mpanga on the list of BoU’s legal team to pursue the CBL matter. She directed PWC to closely work with the firm in carrying out a forensic audit on CBL and this angered the Sudhir camp. That forensic report became the basis for the CBL’ sale to DFCU which took it after other bidders became disinterested in seeing the bank’s vulnerable situation (it had just UGX1.5bn against depositor obligations stretching over UGX1trn). This was long after Edith Kasekende had been working for BOWMANS as HR consultant. Even after quitting PWC, after Francis Kamulegeya communicated that PWC would be scaling down on HR practice to concentrate on its core function which is audit, Edith Kasekende maintained a consultancy relationship with BOWMANS and all this clearly had nothing to do with Dr. Kasekende or any dealings regarding CBL. On starting her own company, she still occasionally moved in to support and supervise other teams on ground working to ensure the BOWMANS HR functions worked well. Of course she would be paid by BOWMANS for her services and it’s these payments that Sudhir’s fans misconstrued for being a conduit for money to her husband Dr. Kasekende.  Because they wanted to make Dr. Kasekende look shady and dirty, they also deliberately misrepresented Edith’s bank statements to exaggerate her bank balances as if she is a billionaire whereas not. She simply kept fixing her own retirement benefits package in order to get some interest at the end of the banking year but Sudhir’s fans made it appear she was damning rich.

CONFLICT OF INTEREST CLAIMS;

But there has also been claims of conflict of interest being propagated by Dr. Sudhir’s supporters. But there is one glaring case they never speak about. Ernest & Young which OAG John Muwanga hired to do the latest audit report on BoU had for some time back accumulated an axe to grind with Bagyenda. As the powerful Director supervision, Bagyenda had denied E&Y business a few years ago and struck them off the list of audit service providers after they missed submitting very important pre-qualification documentation.  And here was the same firm being tasked or hired by Muwanga to audit BoU decisions including those that occurred at a time Bagyenda was in key authority and decision-making positions. Its hard ruling out this being an opportunity to settle an old score against Bagyenda and other heavyweights at BoU.

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COVID19 WOES: Equity Bank Cancels Dividend Payout To Its Shareholders…

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EUBL Mnaging Director Sam Kirubi

The Board of Directors of Equity Group Holdings Plc, has cancelled the Proposed Dividend payout of a Ksh. 9.5 billion (UShs336bn) to its shareholders for the financial year ended 31st December, 2019.

In a letter dated 26th May 2020, Mrs. Mary Wangari Wamae, the Group Executive Director who oversees the Group’s subsidiaries, EGH board cancelled the payout to, “Conserve cash to enable the Company to respond appropriately to the unfolding crisis in terms of supporting its customers through the crisis and directing cash resources to potential opportunities that may arise as economies in which the EGH Group operates begin to recover.”

Equity Group Holdings Plc is the largest bank on the Nairobi Securities Exchange by market capitalization.

Mrs. Wangari says, “During the release of the financial results of Equity Group Holdings Plc (the Company) for the financial year ended 31st December, 2019 on 19th March, 2020, it was announced that the board of directors of the Company (the Board) had resolved to recommend to the shareholders of the Company for their approval at the upcoming annual general meeting, the payment of a first and final dividend of KES 2.50 for each ordinary share of KES 0.50 for the year ended 31st December, 2019 (the Proposed Dividend Recommendation).”

She adds, “As the notice of the annual general meeting has not yet been issued the Proposed Dividend Recommendation has not yet been put to the shareholders for their consideration. The Board has considered the events that have taken place since the financial results of the Company for the year 2019 were released and particularly the effects of the COVID-19 pandemic to both the world and the Kenyan economy.”

L-R: Dr. James Mwangi and Mrs. Mary Wangari Wamae

“After careful consideration, the Board has resolved not to present the Proposed Dividend Recommendation at the forthcoming annual general meeting, because the Board wishes to exercise financial prudence so as to conserve cash to enable the Company to respond appropriately to the unfolding crisis in terms of supporting its customers through the crisis and directing cash resources to potential opportunities that may arise as economies in which the EGH Group operates begin to recover,” she writes.

Mrs. Wangari says, “Accordingly, the Board has passed a resolution withdrawing the Proposed Dividend Recommendation and instead will be recommending to the shareholders that no dividend is paid for the financial year ended 31st December, 2019. The Board continues to evaluate the potential impact of the pandemic on the Group and to formulate and implement plans to mitigate this impact. In this regard, the Board will in the usual manner ensure that it keeps the shareholders informed.”

“Therefore the shareholders of the Company and other investors are advised to exercise caution when dealing in the Company’s ordinary shares on the Nairobi Securities Exchange, the Uganda Securities Exchange and the Rwanda Stock Exchange,” she notes.

 

By Grapevine Reporter

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I Am Going To Bewitch Someone – New Vision’s Tegusulwa Warns Boss Kabushenga After Being Served With Forced Leave Letter…..

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Tegusulwa and Kabushenga (inset)

New Vision’s Chief Executive Officer (CEO) Robert Kabushenga is in fear for his dear life after being threatened with witchcraft for sending staff on forced leave for three months.

A credible source at Vision group has told the Grapevine that on Thursday afternoon, Tegusulwa, who anchors a motivation slot ‘Toli Mwavu Mutwe gwo gwe mwavu’ on Bukedde TV was among the staff who were served with letters sending them on forced leave by NV’s Human Resource Manager.

This did not augur well for Tegusulwa who first thought that it was a joke since he considers himself as one of the essential staff at vision group given his vast experience and dynamism.

With the forced leave letter in his hands, Tegusulwa, a law student at Kampala International University (KIU) did not believe what he was reading. He immediately stormed Kabushenga’s office for an explanation insisting that it was a mistake to serve him.

Kabushenga boldly informed him that it was not a mistake but the company had decided to send some of the staff home as they try to weather the COVID19 storm.

A sample of the letter given to some of the staff whose employment at NV was terminated

This website has been reliably informed that Tegusulwa pleaded with Kabushenga to change his mind because he has a lot of responsibilities like paying his tuition at KIU and taking care of his family but all these pleas fell on deaf ears. Kabushenga insisted that it was the company stand.

He further told Tegusulwa that it was not a personal decision and he should not take it personal on him or the Human Resource Manager to the extent of not greeting them when they meet.

When Tegusulwa left the CEOs office, he stormed Bukedde TV newsroom and threatened that, ‘I think I should now turn to witchcraft and bewitch this man’.

In the letter, Tegusulwa is going to be paid half of his salary which means he is going to be paid Shs.500, 000 for upkeep during the forced leave.

However, this website has learnt that some of the staff sent on forced leave like James Serunkuuma the Manager of Bukedde TV 2 had refused to vacate office but Kabushenga ordered security not to allow any of them to access their offices.

Efforts to speak to Tegusulwa were futile.

It should be remembered that two weeks back, Kabushenga issued a memo to all the New Vision staff that the company no longer has money to cater for all of them due to the economic crisis brought by COVID19 pandemic.

 

By Sengooba Alirabaki

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You Cannot Deny Savers Their Money, If You Cannot Help Them Now, Where Is The Better Life You Have Always Promised Them? – Former NSSF D/MD Writes To Finance Ministry, Blasts Her Former Boss…

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Ms. Geraldine Ssali and Mr. Byarugaba (inset)

Former National Social Securities Fund (NSSF) Deputy MD Geraldine Ssali Busuulwa has punched holes in a letter written by his former boss Richard Byarugaba on denying savers 20% of their money to help them through the Covid19 crisis.

In a letter to the Minister of Finance Planning and Economic Development, Geraldine asked Byarugaba that if NSSF cannot come in at such a time for its desperate members, when shall they step in to “ease the noose” around their necks? Where is the better life that members have always been promised when they need it?.

Below is her letter:

NSSF’S LETTER TO THE MINISTER OF FINANCE,PLANNING AND ECONOMIC DEVELOPMENT.

Good afternoon Sir. Yesterday you asked for my opinion on the letter NSSF wrote to the Minister with regards to the Covid-19 relief for its members: Paying of 20% of each member’s balance.

I’m not sure if the minister also asked Management to indulge in the Macro economic impact of this “transaction” but I think that would be MoFPED and Central Bank to competently handle Macroeconomic policy and give the final position. NSSF manage should concern themselves with their primary strand of responsibility- providing social security to it’s members.

There’s a school of thought on the theory of the half glass. Basically stating that the Optimistic mind (sighting opportunities and possibilities) sees the glass half full and the Pessimistic mind(seeing difficulties, impossibilities and challenges) will always see the same glass half empty! A quick scan of the document would suggest the Fund’s managers have decided to fall under the later, in order to discourage such a proposal from ever seeing the light of day. An optimistic Fund manager on the other hand would have used this opportunity to (“do what it says on the tin”) and entice/attract a bigger (including voluntary savers) membership to the Fund by demonstrating their relevance and usefulness to existing members at such a time when most governments are extending financial assistance to their vulnerable citizens in form of social welfare programs- I trust you have been following at International level so I shall not belabour ……….

Of course, the UGX 380 m that NSSF gave to the National Task Force efforts under the Prime Minister’s office was appreciated by the country at large but now it’s core members need NSSF support for some of their money to bail them out as they struggle to sustain their families and meet their day to day obligations.

The Fund management in citing dire negative economic consequences is stealthily and technically avoiding their natural responsibility – The purpose and cause on which NSSF was formed. Any systemic economic risk that was meant to happen due to the global pandemic, Covid-19, is happening right now and there’s nothing NSSF can do about it. This risk is already crystallising in the Ugandan market and every player in the market will feel its heat! So whatever must go wrong is going wrong as we speak. However, the non- systematic risk anticipated by the Fund managers prior to Covid- 19 can be hedged by simple instruments going forward. For example if the treasury desk officers finds that their asset interest rates are falling, they can acquire a liability whose interest rate will offset any loss on that asset. There are simple Zero cost financial instruments being offered by banks in our market like Stanbic, Stanchart, Equity and the like. I’m fully aware that the Fund has got a risk management framework, that takes into account scenarios and simulations like “a run on the Fund” and any competent crisis management plans would have been put in place to cater for such contingencies as standard procedure for any given financial or quasi financial institutions in this market.

So the net Cash of UGX 2.5 Trillion needed within the next one year (12 months) to fulfil this obligation, boils down to affordability, without any political innuendo or undertones.

Going by the content of the letter you shared and their last published Financial statements of Financial Y/E June 2018/19, my unbiased/unprejudiced thoughts are as follows:-

In order for NSSF to fulfil the liquidity needs of 20% of member balances alluded to, they would need to look at their liquidity position. First the UGX 125 Bn tacked away in reserves for a rainy day; it’s raining now! Secondly, the Current assets at about UGX 280 Bns are immediately available if they chose to operate an Accident and Emergency system – it attends to the most fatal not who came first or who is more important. Like a case by case basis. Secondly, those Government Securities held by the Government of Kenya that are over a UGX 1 Trillion! In a nutshell, this is Ugandan saver’s money being used to build Kenyan infrastructure, and this is okay! Thirdly, a phased liquidation of their treasury bills, bonds and Fixed deposits within the Ugandan market. This assured fixed income albeit with different maturity tenures falling under 3 – months, 6- months, 1- year, 5 years, 10- years, etc.They would have dive in and look at these assets concurrently with the monthly contributions they collect from members. These assets never have the same maturity times. This asset class accounts for over 70% of the whole investment portfolio of NSSF so a phased transaction can be used to cushion any negative effects anticipated on this asset class alone without needing to touch the real Estate and Equities classes. The payments required for the fulfilment of the contractual obligations under the real estate contracts ( which contracts normally span over 5-years plus, are already planned for and fall under business as usual. Management is not required to pay 100% of these obligations upfront in one year and each contract has pre-negotiated terms in case of delayed payments. Never mind that an average NSSF saver will not be able to afford those houses for example in Lubowa. You heard right, 75% of the Fund is owned by 100K members (who are 4% of members) who probably already own homes anyway. This lot may not even need their 20% at this time. The Fund collects UGX 100 bn cash from savers every month and only approximately 3% of this goes to paying monthly benefit claims to members. The rest of the cash can also be added on the 20% settlement.

There’s an artificially amplified impact on the Ugandan economy. Uganda’s GDP alone without crossing to the rest of East Africa is currently USD 27.46 Bn (UGX 92.7 Trn). The UGX 2.5Tr (20%) is a mere 3% of this but would still be spent and re-invested within the economy by its members without significant economic leakages. This is still a boost in the economy because more money in circulation to buy goods in the market. The impact of this pay out on exports as NSSF suggests is decimal because no one knows for sure how much of that money once paid, would be channeled towards exports, sufficient enough to cause an impairment on our Balance of Trade/Payments position as a country. Uganda’s economy is said to be growing at 6% p.a. Core inflation is currently running at 3.4 % and with all the projected doom as a result from Covid -19; is projected to stand at 4.6% in 2021! A difference of only 1.2%. Uganda has in addition along all the other EA countries got a lot of external budgetary support coming to a total of UGX 3.2 Trn. The total effect of all this should be enough to mitigate any shock in the market resulting from a cash outflow of UGX 2.5 Trn. It should be mentioned that most of this money is coming in as the much needed USD and EUROs forex. The spokes person for Bank of Uganda and MoFPED must throw more light on this aspect.

From a human perspective alone, when I weigh the cost of defaulting on a real estate project, the so called “damage” to the east African securities markets, the sell of securities at a discount against the UGX 2.5Tr ( 3% of GDP) and the Financial reporting implications alluded to by the Fund’s management AGAINST the need to bail out Fund members with a small amount of their own hard earned savings needed to survive, I feel the very purpose of the Fund’s existence has been obliterated the inept mindset of the Fund’s management that’s contingent on chance survival and smoke screens!

The citation of Jamwa’s case totally has no place in this debate. I’m not a lawyer but as you know, ignorance of the law has never been a defence. This precedent has been misinterpreted in this case and misapplied. Every situation is unique and carries unique merits, context and circumstances. If the Fund’s managers in this case chose to exit a financial position on any securities in the market prior to Maturity to acquire liquidity in order to save lives, the courts of law would apply the Spirit of the law and not literally or mischievously interpret the law to lock them up! A legal opinion can be officially sought by NSSF from the Attorney General’s office or even from their own external lawyers! You can further consult your legal associates on this.

The Legal aspects of concern to be revisited is the aspect of retaining reserves from the annual profits made. All remaining profits after costs are supposed to be distributed.The law only allows the Fund managers to remove their operating costs and distribute the rest to the members whose money was used to generate those profits. Any retention is illegal. Should a member exit the Fund leaving some of their earnings under reserves, they will not have benefited and that money will probably go to future members whose earnings were not used to generate those profits. One of these days a serious Member will file a law suit against the Fund only to expose the Fund to litigation waste of resources. They should also seek AG’s on this matter.

It’s my strong view that management at this stage must remind themselves the very justification of NSSF’s existence – to provide a social security safety net for its members whenever their social security is under threat, not single handedly trying to save the East African Economy as they would like us to believe (sec 2.2 of the letter). Besides, year on year, members are reminded how NSSF Uganda is the largest Fund in East Africa. This statement is always met with a Thunderous applause from its members and the public at large. But what does this exactly mean to a layman who has been contributing to NSSF for the last 20 years? NSSF has to walk the walk and talk the talk! This is the time for members to size up this “largest” Fund in EA.

And for the humour: My brother T. Mirundi would say; If a man keeps preaching and boasting about his size, test that size by first asking him to buy you a small Toyota Rav 4. If he switches off his phones and relocates to another village, just know he was a Fake-master (Mufere)

For simplicity’s sake, ILO and ISSA have put forward a range of standards and guidelines that are really a whole topic for another day, but simply put, for one to be socially secure is to have a roof over your head, have a daily meal, care for medical, have some gainful employment, and an income of sorts. For example members of NSSF in companies that are economically stressed have been laid off due to the prolonged effects of the Covid lockdown. If you step out for example and go to the sugar plantations across the country, people are counting on the arrival of Posho and beans from the National Task force. Other people have even lost their homes due to water bodies like Lake Victoria naturally claiming their homes and other property. Some members and their families not only starving but with rent and loan arrears and some have lost all their properties. Now if NSSF cannot come in at such a time for it’s desperate members, when shall they step in to “ease the noose” around their necks? Where is the better life that members have always been promised when they need it?

The Fund has sufficient headroom on profitability to play in the Fixed Income asset class without the need to call on the rest of its real estate and Equities portfolios. The Fund can afford this transaction especially if it’s staggered over time without causing any significant negative impact. The powers that be should find the political will to pull down this facade painted by NSSF management and pay the 20% especially to those members that need it. most first. A rejection of this proposal would be anything but economic!

 

GERALDINE SSALI

14/05/2020

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