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@observer Tue, 24 Oct 2023 17:26:34
Aya loses again in court: Pearl of Africa hotel to be auctioned
Aya Investment Limited, which owns Pearl of Africa Hotel Kampala has again lost a bid to stay the execution of an order to auction the hotel for non-payment of loans amounting to over $300 million (about Shs 1.1 trillion).
Three Court of Appeal judges; Fredrick Egonda-Ntende, Monica Mugenyi, and Oscar Kihika ruled that a reference filed by Aya against his financiers Industrial Development Corporation Of South Africa Limited to stay the orders of the Court of Appeal judge Christopher Gashirabake allowing the execution orders became untanable when Aya withdrew the substantive appeal on, which the stay of execution application was based.
“We therefore find that following the withdrawal of Miscellaneous Application No. 271 of 2023, the application upon which the single judge decision referred to this court was premised, this reference is misconceived and improperly before this court. We would therefore dismiss this reference with costs to the respondent,” the judges ruled.
According to court records, Aya Investments Limited which belongs to businessman Muhammad Hamid, between 2007 and 2017, and Industrial Development Corporation of South Africa executed various financial credit agreements as well as security agreements, to finance the construction of the Pearl of Africa hotel.
Following a breakdown in the business relationship between the parties and the supposed default by Aya on its financial obligations, his financiers instituted foreclosure proceedings under the Ugandan legal regime as provided under the security agreements.
Aya objected to these proceedings, instead, opting for arbitration as provided in the loan agreements they had signed. He also obtained restraining orders against the foreclosure proceedings until the arbitration process plays out in South Africa. He also went ahead and instituted Civil suit No. 937 of 2017 that was grounded in contempt of court and breach of contract; to which his financiers responded by filing an application that sought to refer all the matters in the said suit to arbitration.
The arbitration process ended in the favour of the financiers, who also sought orders from the High court to execute them. This prompted Aya to file an application challenging the High court decision to allow the execution of the arbitral orders that included the closure of the hotel.
He lost the application, which was heard by a single judge of the Court of Appeal; Gasharibake hence prompting him to file a reference seeking the matter to be heard by three judges of the court.
When the matter came up for hearing in court, the lawyers representing the Industrial Development Corporation raised a preliminary point of law that the application for leave to appeal upon which the stay of execution was premised had been withdrawn, there was no legal basis for the reference. It is this objection that the court upheld.
“It follows therefore that Miscellaneous Application No. 271 of 2023 having since been withdrawn by the applicant, the substratum of the present reference stands removed, leaving it with no legal or procedural basis. The supposedly automatic right of appeal based on contempt of court illegality would not cure this defect as it was not pleaded either by an amendment to the original application or to the present reference,” the court ruled.
If not appealed in the Supreme court, this ruling means that Pearl of Africa Hotel that is located on Nakasero Hill on the land that previously belonged to the Uganda Broadcasting Corporation, the national broadcaster will indeed go up for action in order to clear the debts that its owner has accrued over the years.
Hamid has already called for help from President Yoweri Museveni against what he called mafiosi aimed at dispossessing him. Museveni has not yet weighed in, at least, publicly on the matter.
Previously, he has bailed out businessmen stressed by loans the latest being Patrick Bitature, the owner of Protea Hotel who was also on the verge of collapse after another financier from South Africa demanded more than $30 million (about Shs 112 billion) in principal and in interest accruing from a loan that had been granted to him and failed to honor.
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@observer Tue, 24 Oct 2023 23:17:41
Guangzhou consulates promotes Ugandan products
The consulate of Uganda in Guangzhou, China used the 61st independence anniversary on October 9, 2023 to promote Ugandan-made products to Chinese traders and consumer.
The consulate organised a ‘Promote Uganda Origin’ event at Meta Incubator – Wisdom Valley, an industrial technological innovation hub in Panyu district, Guangzhou. The afternoon session of the event was a special focus on promoting Ugandan coffee among Chinese consumers.
It entailed a presentation by Dr Emmanuel Iyamulemye, the managing director of Uganda Coffee Development Authority. The guests were treated to Uganda coffee at the newly opened Elgon Café and also had a metaverse experience about Uganda as a country and society.
Ambassador Judyth Nsababera, the consul general, stressed promotion of economic and commercial cooperation between Uganda and China as the central objective of the consulate’s work which also involves attraction of foreign direct investment into Uganda’s strategic sectors; increasing the number of out-bound Chinese tourists to Uganda; and increasing productivity and expanding Uganda’s export base to the Chinese market for its agricultural produce especially Ugandan coffee.
Nsababera also stressed the consulate’s commitment to providing all the necessary support to enterprises wishing to travel to Uganda to further explore existing opportunities. She added that the consulate will soon commence construction of a permanent home in Guangzhou – both chancery and official residence – and that Uganda Airlines is in the final stages of commencing direct flights between Entebbe and Guangzhou which will facilitate easy movement of people and goods between the two countries.
The event was attended by the deputy director general of Guangdong Provincial Foreign Affairs Office, the director and deputy directors for African Division, officials from the Guangzhou Foreign Affairs Office, consular generals from 30 consulates and other members of the diplomatic corps, and a cross-section of Chinese business executives from sectors strategic to Uganda, an official statement said.
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@observer Tue, 24 Oct 2023 23:19:19
Minister Kyakulaga cautions farmers on land usage
The current pressure on land in Uganda, mainly due to population growth, has reduced the land available for agriculture in most areas.
According to Fred Bwino Kyakulaga, the state minister for Agriculture, majority of communities in Uganda have failed to manage land well, leading to fragmentation. For instance, in Busoga and Mbale sub-regions, the average land holding currently is less than four acres. The statistics are even worse in the Kigezi sub-region, where the average land parcel size for most families is 0.4 acres.
Kyakulaga made the remarks last week during the Uganda Breweries Limited (UBL) annual farmers’ symposium that ran under the theme ‘Innovations in Agrotechnology, Seed, and Other AgroInput’, where he was the guest of honour. The symposium acts as a platform to foster mutual understanding, collaboration, policy alignment, problem-solving, and ultimately, economic growth and development among the various stakeholders in the agriculture value chain.
Kyakulaga said that it is only in Acholi, Lango and Karamoja sub-regions where land is still consolidated, and this is because large chunks of land there belong to clans, but land belonging to individuals has also been fragmented.
Kyakulaga, therefore, noted that based on that scenario, they have advised communities where the average land holding is 4 acres or below to engage in intensive agriculture, which can provide high yields and profits on a smaller land area.
“We carried out a study to identify which crops best suit such communities, and the crops identified include coffee, fruits, and vegetables, as well as rearing animals and poultry on zero or rotational grazing. The study also focused on demand for such crops, both regional and international, and their profitability,” he said.
He added that this advice is based on the fact that if these communities engage in those enterprises, they will be able to feed their families and also generate some reasonable income from a limited land area.
During the symposium, the company announced that by 2030, it would have expanded its Farm for Success programme to benefit 50,000 farmers as it seeks to sustainably source 100 per cent of agriculture materials used in producing its various brands from Uganda, specifically from farmers of barley, sorghum, and corn.
Andrew Kilonzo, the Managing Director of UBL, stressed that as part of the company’s efforts to increase diversity and inclusion in their processes, they will be looking to onboard more women and people with disabilities as part of this programme, adding that the goal will be to source over 60 percent of the agricultural produce from women farmers as well as people with disabilities.
UBL currently works with over 35,000 farmers from all over the country to purchase over 8,000 tonnes of barley, 15,000 metric tonnes of sorghum, 18,000 tonnes of maize, and 1,000 tonnes of cassava. Thirty per cent of that comes from northern Uganda, 25 percent from eastern Uganda, 35 percent from western Uganda, and 10 per cent from Buganda.
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@observer Tue, 24 Oct 2023 23:34:45
Court drops charges against businessman in Mukono land saga
Mukono chief magistrate Roselyn Nsenge has halted criminal proceedings against businessman Jackson Twinamasiko.
In the process, the court has paved the way for him to battle UPDF soldier Major Mark Wanyama in a High court civil suit over a seven-acre piece of land on Mbeya island, Mukono district. In her ruling last week, Nsenge stayed the criminal proceedings against Twinamasiko, pending determination of a civil suit Twinamasiko filed in 2019 at Mukono High court accusing Wanyama of grabbing his land.
Nsenge ruled that she could not proceed because the decision of the High court has a bearing on the criminal case.
“The issue of removing boundaries on the land and malicious damage of property before this court will be determined by the High court,” she ruled. “It is better to stay the proceedings at the lower court to avoid the danger of conflicting judgments.”
BACKGROUND
In November, 2019, Twinamasiko bought the seven acres at Shs 70m but days later, the seller, Francis Tyaba, changed his mind and claimed to sell the same land to Wanyama. Tyaba tried to return Twinamasiko’s money while the latter was already enjoying quiet possession of the land but it has since been retained by court pending the disposal of the case.
Wanyama is said to have used UPDF officers to brutally chase away Twinamasiko’s workers. According to court records, the UPDF officers destroyed property on the land and consistently beating up every body that was working for Twinamasiko.
Thereafter, Twinamasiko dragged Tyaba to court challenging the change of heart and he secured an interim order barring any other person from claiming or interfering with the contested land until hearing and final determination of the main suit.
However, Wanyama petitioned the directorate of public prosecution commissions accusing Twinamatsiko of trespass. Wanyama relied on a title deed he had secured with Tyaba but due to Twinamasiko’s earlier interim order, the ministry of Lands canceled the title on grounds it was issued in error.
In-between the fight for the land, Twinamasiko was forced off the land and in the several bloody battles that followed, many of his workers were beaten to near-death by security operatives.
“I have reached out to virtually every office in the country but little effort is being done yet the matter of my land has turned deadly,” he said.
“I am hopeful court will rule in my favour and stop the land-grabbing orchestrated by Major Wanyama.”
GOING FORWARD
Twinamasiko welcomed the magistrate’s ruling, reasoning that it has halted the trumped-up charges against him.
“I legally purchased the land and everything is well-documented. My agreement is not contested at all and there is no way someone can sell land twice,” he said.
Our efforts to talk to Wanyama were futile but his lawyer, Jabaru Luyima, said they intend to challenge the magistrate’s ruling at the High court on grounds that it was not based on facts.
Probed to state the said facts, Luyima said they will be listed in the appeal. It remains to be seen how this highly-contentious issue will be solved but at the moment, it is affecting dozens of people who use Mbeya island for business and trade.
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@observer Tue, 24 Oct 2023 23:41:57
What became of special needs and inclusive education policy?
In 2011, the ministry of Education and Sports released the first draft of the national Special Needs and Inclusive Education policy to give every child equal access to quality education.
Thirteen years later, the disability fraternity wants the government to pass the long-awaited policy, now “stuck” at the cabinet level, writes YUDAYA NANGONZI.
When Mauvice Apia was born 23 years ago, she was a healthy baby with bright eyes. As she grew, Apia was attacked by Measles, which eventually claimed her eyesight at six years.
“I was born a normal child and [got] fully immunized against measles. I think it was God’s plan for me to lose sight,” Apia said. “While in eyeglasses, people don’t believe I am visually impaired. So, I decided to throw them away so that people know the struggles with my sight.”
Apia is among students with disabilities who graced the third National Inclusive Education Symposium 2023 held recently at Silver Springs Hotel in Bugolobi under the theme: Ensuring Inclusive Education: From Theory to Practice”.
She shared the plight of the visually impaired at institutions of higher learning at the two-day conference. Apia is a first-year student on government sponsorship pursuing a Bachelor of Office and Information Management at Makerere University Business School (MUBS).
Like other speakers, Apia pointed to the absence of the national Special Needs and Inclusive Education (SNIE) policy as an impediment to access to quality education at all levels. Whereas MUBS embraced her disability by accommodating her on campus, she is lucky to have her sister as a guide.
According to Apia, most visually impaired students get strangers and often fall out due to inefficiencies. At universities, the government offers a stipend per semester for guides but government students with disabilities struggle to find appropriate support. She also decried some private universities that declined to admit students with disabilities despite meeting the course requirements.
“If only the government passed the policy, lecturers would be mindful of conducting online lessons that favor students with disabilities. Universities would also be compelled to provide assistive devices to both government and private-sponsored students in a bid to attract more students with disabilities to join institutions of higher learning,” she said.
Her concerns were backed by Esther Kyozira, the executive director of the National Union of Disabled Persons of Uganda (NUDIPU), which has been part and parcel of the SNIE policy.
POLICY IS LONG OVERDUE
The ministry of Education documents have consistently defined inclusive education as a system where all children, regardless of their abilities or disabilities, study in the same classrooms and schools. However, the current setup dictates that children with special needs study from either special schools, units attached to mainstream schools, or all-inclusive schools.
Kyozira said due to the absence of a policy, this arrangement can limit the exposure of children to diverse learning environments, lead to stigmatization, and perpetuate stereotypes about disabilities. Yet, inclusive education is meant to promote acceptance and understanding of differences, hence reducing the likelihood of stigma.
“The policy has stayed long in cabinet. The ministry has often encouraged us that steps are being taken but we see the years have gone. The first draft came in 2011 and this is 2023. For 13 years now, that’s a long period. The policy is long overdue and needed by the disability sector and special needs departments implementing special needs education,” Kyozira said.
She explained that although there is no guiding framework, several actors have abused the essence of inclusive education amidst the dire need for assistive devices for learners with disabilities.
“[For instance] a child with visual impairment will come to class but because they are enrolled in a school without Perkins machines to help with their braille learning, this child will just sit in class without taking notes. For those with hearing impairment, few teachers are skilled in sign language. If a child needs hearing aids, the equipment alone costs more than Shs 3m. Which parent can afford this yet we are still convincing them to take children with disabilities to school?” she asked.
The Norwegian Association of Disabled (NAD), working with 91 government schools to make them inclusive, is also pushing for the passing of the SNIE policy. The NAD Regional Inclusive Education Advisor, Moureen Kekirunga, said they have since found that learners with sensory impairment and multiple disabilities have lagged on the road to inclusive education in Uganda.
“We have also seen that learners who are blind and deaf have continued to drop out of schools that we support because of a lack of specialized teachers and materials that can enable them to learn. The policy should come out soonest so that we can authentically speak about inclusion,” Kekirunga said.
In 2016, the Uganda Bureau of Statistics indicated that 12.4% of Ugandans live with some form of disability. The Disability Status Report Uganda, 2019 further attributed limited access to education by children with special needs to a weak policy framework. The report emphasized that the lack of an inclusive education policy has affected the effective implementation of inclusive education in Uganda.
The National Council for Disability which authored the report then urged the education ministry to expedite the development of the policy as well as allocate the required resources for the implementation.
EDUCATION MINISTRY RESPONDS
The director for Basic and Secondary Education, Ismail Mulindwa, agreed that the policy has dragged on. He, however, said the policy is now awaiting presentation to the cabinet.
“When the policy reached cabinet, they identified some gaps. We have since fixed them and hope the cabinet will soon consider the policy. The struggle was passing through the lower levels and securing a certificate of financial responsibility from the ministry of Finance. We have all that in place and the policy is now less than a year in cabinet to iron out a few technicalities,” Mulindwa explained.
At the symposium, he asked the disability fraternity to consider the ministry’s apology for performing below standard during the Covid-19 period.
“We gave several excuses for not delivering learning materials for children with special needs on time. We are sorry for the mishap. I know we have not performed to the expectations of our disability enthusiasts but all efforts are there to ensure that our learners are not left behind,” he said.
Mulindwa shared that the ministry is still challenged with inadequate funding, negative attitudes towards children with disabilities from communities, and few special needs teachers. The ministry has agreed to make special needs and inclusive education a compulsory module in teacher training institutions at all levels as a measure to curb the shortage of specialized teachers.
CHANGE ASSESSMENTS
To further address the plight of special needs learners, the assistant commissioner for inclusive and non- formal education, Sarah Ayesiga, said the policy will check on assessments offered to candidates during national examinations. She commended Uneb for modifying the assessments by adding 45 extra minutes for each candidate, and provision of transcribers, among others, but a lot leaves to be desired.
“The policy must compel Uneb to have disability-friendly assessments. When I was doing my masters abroad, we supervised an autistic child who did their exam for a full week and passed. Uneb can borrow a leaf from such policies,” Ayesiga said.
She added that children should be assessed in specific competencies instead of subjecting them to the entire curriculum in final examinations. This year, at least 777 candidates with disabilities are writing their O-level exams which commenced last week. Some 2,580 and 341 candidates registered to sit the PLE and UACE examinations starting next month.
The principal examinations officer in charge of special needs at Uneb, Daniel Alenyo, urged teachers to adequately prepare the candidates to avoid accusing Uneb of failing learners with special needs. In inclusive schools, Alenyo insisted that there are no specialized teachers while the routine transfer of such teachers immensely affects learners.
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@observer Tue, 24 Oct 2023 23:56:44
Uganda gets top spot in 2023 investment ranking
For the second year running Uganda has clinched the fourth spot in the continental financial markets index conducted by the Absa Group Limited in association with the Official Monetary and Financial Institutions Forum [OMFIF].
This year the index covered 28 countries with two new entrants in Cabo Verde and Tunisia following the addition of Zimbabwe, Madagascar and the Democratic Republic of Congo [DRC] in 2022. The annual report produced by the index is premised on market depth, market transparency, tax and regulatory environment, access to foreign exchange, capacity of local investors, macroeconomic environment/ transparency, and legal standards and enforceability.
In spite of a fall in foreign exchange reserves, a poor performance in the capacity of local investors and the lack of market depth in the equities and bond market; Uganda outperformed its neighbours with bigger economies: Kenya, Tanzania, and Ethiopia, and was only topped by South Africa, Mauritius and Nigeria in the continental ranking index.
With the index’s categories ranked out of a total score of 100, Uganda bagged the following scores in the benchmarked six categories: macroeconomic environment and transparency [86/100], legal standards and enforceability [85/100], market transparency, tax and regulatory environment [79/100], access to foreign exchange [67/100], market depth [46/100] and capacity of local investors [14/100].
Uganda’s subpar performance in market depth and capacity of local investors sticks out like a sore thumb. The document details market depth as the size and liquidity of domestic equity and bond markets along with the diversity of listed assets. The Pearl of Africa’s low score in market depth speaks to a below average stock market, accompanied with little activity in the domestic bond market.
This was attributed to a challenging global economic environment rampant with inflation, rising interest rates in advanced economies and geopolitical tensions that had a ripple effect on financial markets in Africa. The document further captured a drop in stock market capitalization as a percentage of GDP in Uganda between June 2022, and June 2023.
Regarding the capacity of local investors, the index evaluates the potential for institutional investors to drive capital market growth based on the size of pension fund markets both in per capita terms and relative listed securities. On both parameters, Uganda performed poorly as pension fund assets per capita fell to below 0 [negatives], on top of there being no change in pension fund size, and pension fund assets domestically.
Another area Uganda came short was in foreign exchange reserves. The country experienced a fall in forex reserves from 4.2 months in import cover in 2021 to about 3.7 months of import cover in 2022. This was attributed to rising interest rates in advanced economies and a flight to safety amid the Russia-Ukraine war which led to capital outflows for much of Africa.
In like manner, Uganda wasn’t able to duplicate the success of her neighbours — Kenya, Tanzania and DRC in improving its credit score, a fete the Great lakes nations achieved because of higher international corporate ratings. On the bright side, Uganda [along with Botswana] led the pack in macroeconomic environment and transparency. This is because of Uganda’s transparent fiscal and monetary policy decisions as well as timely data releases for key macroeconomic variables.
Also, inflation in Uganda dropped from double-digit territory in 2022 to below 5 percent which is within Bank of Uganda’s target. The central bank pins this decrease in inflation on lower food and fuel inflation and recent policy tightening. It is worth noting that between the years 2017 and 2022, Uganda has experienced a compound annual GDP growth rate of 4.5 percent; and this is expected to rise to 6.5 percent between 2022 and 2027.
The report applauds Uganda’s efforts at investor education to improve financial literacy by remarking: “In Uganda an investor education programme was implemented to enhance knowledge and understanding of capital markets products and services among individuals and communities”.
This is done to encourage savings to create awareness about capital markets, and to drive market activity through collective investment schemes. Uganda maintained exclusivity by being one of the seven economies in the index to have adopted a netting legislation. This it accomplished by passing the Financial Institutions Regulations 2023 bill in April. With netting legislation in place, an investor will be able to settle a loss in one financial instrument with another that has got gains.
For example, if an investor has a debt in one security, they can offset it with the security that has gains. Also, it’ll make payments to creditors more assured in case of defaults. The Absa group report makes mention of the steps Uganda is taking to develop guidelines to issue financial securities which will be used to bankroll environmental projects known as green and sustainable assets.
On how best Uganda can solve her problems of the lack of market depth, depleting foreign exchange reserves, and shrinking pension fund assets and size; founder of Uganda Securities Exchange and former chairman of East Africa’s largest pension fund — Uganda National Social Security Fund; Mr. Geoffrey Onegi Obel offered the following answers: “Financial sector depth does not happen by accident. It is a direct function of monetary and fiscal Policy. We have been pushing for a Uganda Bond Market Development Program for decades [and still are]; however, we cannot succeed in the policy vacuum which currently prevails in favour of a cash economy”.
Concerning the depth of the equities market he replied, “The equities market cannot also grow and develop without a strong bond market as its foundation – especially for benchmark pricing”.
When making the case for how to grow pension funds in size and assets the former pension fund chief had this to say, “We have to abandon the failed poverty alleviation school of thought that Ugandans/ Africans cannot save”.
He continued to explain that an integrated economy wide domestic savings policy/program would go a long way in boosting the size and types of lifetime savings programs. In his own words, “We have also been pushing for this for decades”.
In regard to diminishing foreign exchange reserves Mr. Onegi Obel acknowledged that “For the size of our economy and natural resource endowment, our forex reserves are small”. “Indeed, we would be in trouble if it were not for Ugandan diaspora remittances. These remittances can even triple over a short timeline with a policy framework as in other countries”.
To counter a declining foreign exchange. reserve, Mr. Onegi Obel recommends that “we [Uganda] style up and produce world class goods and services in order to grow our foreign reserves”.
He notes that by making simple strides like joining the ranks of the cleanest countries in the world, “Our tourism and related revenues would double or even triple”. This alone would bring in more foreign exchange and, in the process, replenish our forex reserves.
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@observer Wed, 25 Oct 2023 00:11:58
How gold cartels operate in Uganda
The recent arrest and remand of David Balondemu, chairman of the Kampala District Land Board (KDLB), has sent ripples through the real estate and gold dealing communities.
Last week, Balondemu was charged in court and remanded for allegedly obtaining money under false pretenses and conspiracy to commit a felony. His associates, James Jeff Mugisha and Godfrey Mabirizi, are also in custody, while another accomplice, Eric Geoffrey Mkwe, remains at large.
The court heard that between March and November 2021, the accused allegedly obtained $600,000 (approximately Shs 2.2 billion) under the false pretense of selling 53kg of gold to Korean national Hyun Uk Kim.
Multiple sources who spoke to The Observer suggest that the Balondemu case is not an isolated incident, but rather the tip of the iceberg in a shadowy under-world of gold and real estate dealings. In fact, it’s an open secret that one of the quickest routes to wealth is through real estate and gold transactions.
On the flip side, Kampala is also a well-known hub for laundering illicit money from abroad, often ‘cleaned’ through such dealings. A striking aspect of this issue is that nearly all these transactions are conducted in cash.
“A majority of the ‘investors’ who fall victim to scams are also involved in questionable activities like money laundering,” said a source at the Criminal Investigations Directorate (CID).
“Many are reluctant to report such cases, and even when they do approach the police, they request that the matter be handled discreetly to avoid media attention. As a result, the perpetrators often go unpunished.”
TOUGH SEARCH FOR JUSTICE
According to a source at the Criminal Investigations Directorate (CID), the case against Balondemu was filed in December 2021 at Katwe Police Station. However, the Korean victim preferred that the police not handle the case completely in hopes of recovering her money. Initially, the case was managed by Benon Ayebare, the then-regional police commander.
“Entrusting the case to the police turned out to be a costly mistake. Every officer who handled the case file extorted money from both parties, leading to a failure in progressing the case,” the source revealed.
Frustrated by the stalled police process, Kim reportedly reached out to several top ministers and NRM officials. Despite her efforts, she found no resolution until a few weeks ago when she went with Ko- rean Ambassador Park Sung-Soo to meet Gen. Muhoozi Kainerugaba, the President’s first son, in Entebbe.
“The accused were spending more money than the Korean victim to quash the case. However, when she appealed to Muhoozi, he provided a direct link to President Museveni,” said the source.
Upon learning of the situation, President Museveni directed the State House Anti-Corruption Unit (SHACU) to investigate the matter independently, without police involvement. The President did not immediately order Balondemu’s arrest, given that as KDLB chair, Balondemu often consults State House on key land matters. Nonetheless, when the SHACU investigation implicated him, the President gave the green light for his arrest on October 18.
DRAMA AT CID
Balondemu was reportedly detained at the Kibuli CID headquarters. However, when news of his arrest broke, police were inundated with requests for his release.
“I’ve never witnessed such a high number of high-profile individuals, from both the government and the opposition, visiting a detainee,” the source said. Among those who reportedly pleaded for Balondemu’s release were former Speaker Rebecca Kadaga and Kasule Lumumba, the state minister for General Duties.
Nonetheless, officials from the State House Anti-Corruption Unit (SHACU) remained resolute, informing them that the directive for his detention came from ‘higher authorities.’ On October 20, Balondemu appeared before the City Hall court, where a dramatic event unfolded.
Sources revealed that SHACU officials, suspecting that the magistrate might grant Balondemu bail, entered the magistrate’s chambers with clear orders from ‘higher authorities’ to remand him for at least three weeks, regardless of the credibility of his sureties.
In the end, although Balondemu’s five sureties had all their paperwork in order, the magistrate cited the need for additional time to review the documents and remanded him until November 6.
“This is a setup. How can he be remanded for such an extended period based on such a trivial reason, one that doesn’t even take five minutes to verify?” lamented one of Balondemu’s lawyers, who preferred to remain anonymous, outside the court.
WHO IS BALONDEMU?
Balondemu is recognized as a savvy lawyer who has discreetly climbed the ranks to become the chairman of the Kampala District Land Board (KDLB). He is no stranger to controversy; in 2015, his diploma in Legal Practice was revoked by the Law Development Centre (LDC) on charges of academic dishonesty.
However, the court ruled in his favor, citing the LDC’s failure to provide him with a fair hearing before rescinding the award. He is also a prominent and affluent figure in both Busoga and Kampala politics, where he financially supports several politicians.
HOW GOLD CARTELS OPERATE
A new class of extraordinarily wealthy Ugandans has emerged in recent years, largely due to involvement in gold scams. To execute a scam, these cartels often enlist a lawyer to draft the necessary paperwork, as well as a high-ranking army or police officer, and a supposed gold seller.
“Sometimes they go a step further by involving an ‘illiterate’ gold dealer from the DR Congo, accompanied by an ‘interpreter’,” said a police source familiar with these dealings.
Prospective victims are primarily lured through recommendations from other dealers who have profited in the industry. These recommending individuals pose as successful dealers and may even initially sell genuine gold to the target.
“After closing the first deal, the target frequently opts to travel to Uganda to conduct business directly with the primary source,” said the source. Surprisingly, some of these ‘investors’ manage to bring in thousands or even millions of dollars into the country through various entry points without much hassle.
“Upon the target’s arrival in Uganda, a senior army or police officer, who is part of the scam, arranges for a complimentary police escort to accompany the target wherever they wish to go. Those unknown individuals you see in tinted cars, being led by police patrols with sirens and breaking traffic laws—many are gold dealers. For the ‘General,’ renting a patrol vehicle for Shs 1 million a day is trivial when planning to defraud more than a billion shillings,” the source added.
EXECUTION
According to sources, the scam may take several months to execute. During this period, the cartel assists the target in processing essential documents, including company registration, obtaining a gold operating license from the Uganda Revenue Authority (URA), and securing clearance from the Ministry of Energy and Mineral Development.
After the scam is executed, victims are often coerced into not involving the police.
“What usually happens is that while the victim is led to believe that everything about the deal was illegal, they themselves are often complicit, typically involved in money laundering. Local cartels are aware of this, making it difficult for victims to report such cases,” said the source.
INSTITUTIONAL LAPSES TOP OF FORM
When seeking comments on the handling of significant sums of money within the country, a senior official from the Financial Intelligence Authority (FIA) pointed out that banks and immigration officials often display complacency or collaborate with criminal elements.
The source stated, ‘In many instances, banks continue to facilitate these transactions even after we have flagged certain accounts. As a result, we occasionally find ourselves powerless to pursue such matters due to their sheer volume.”
RELATED CASES
“Balondemu is not the first individual to be arrested in connection with such a failed deal. In 2021, lawyer Simon Peter Musangala, along with two others, Martin Bwayo and Enock Katwesigye, also known as Colonel Frank, faced charges of money laundering, facilitating money laundering, and cheating. They were accused of obtaining $5.5 million (approximately Shs 20 billion) from an American national, Anastasia Belesis, under the pretense of selling gold.
In this particular case, after the American had transferred the money to the suspects, he instructed them to leave the location. However, during their departure, they were intercepted by seven gunmen dressed in UPDF uniforms who held them at gunpoint and confiscated the money. This case is still pending in court.
In 2019, another lawyer, Paul Wanyoto Mugoya, was remanded for charges related to obtaining money through false pretenses and conspiracy to commit a felony. Yahya Osman Muhammad claimed that he had been defrauded of approximately Shs 600 million while attempting to purchase 265 kilograms of gold.
In 2018, Wanyoto faced charges alongside seven senior police officers, led by the then-influential Siraje Bakaleke, for extorting Shs 1.4 billion from Koreans Park Seunghoon and Jang Shingu Un. According to the allegations, after obtaining the money, Bakaleke arrested the Koreans for unlawful presence in the country and subsequently escorted them to the airport, facilitating their deportation.”
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@sqoop Tue, 24 Oct 2023 09:27:08
Kampala revelers celebrate food, fashion at ObaFest
Bell ObaFest is set to be a monumental celebration of East African cuisine, music, and culture that brings people together to savour the region’s unique flavour, sounds, and traditions from Kenya, Uganda, Tanzania, and South Sudan, the organisers have said. With this, the first edition that happened Sunday at Jahazi Pier Munyonyo met most […]
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