Why ICT Minister Baryomunsi is in panic mode as Museveni questions dealings at UTel, soliciting bribes from an investor

By Our Reporter

Kampala – Secret audio recordings tabled before President Yoweri Kaguta Museveni could land several ministers including Minister of ICT and National Guidance Chris Baryomunsi in trouble.

The three ministers allegedly travelled to Dubai to meet an investor last month.

Sources add that the President noted that the audio recordings and photographs indicate that ministers from the finance ministry and that of information and communication technology (ICT) allegedly solicited for a bribe from an Investor.

While in Dubai last month (March 2024), the ministers allegedly negotiated a 10% cut out of the total value they were supposed to invest in Uganda Telecommunication Corporation Ltd (UTel). After receiving their cut, they also blocked any access to the investor and returned to Uganda.

What these ministers did not know was that the investor had met President Museveni in previous encounters and briefly explained their intention to invest in Uganda.

Sources further indicated to this publication that the President met the investor and his Rowad Capital Commercial (RCC) group in 2021 and was impressed with their capacity to turn around the fortunes of UTel (formally Uganda Telecom Ltd).

Meanwhile, Baryomunsi was on the defensive as he took to his X (formerly Twitter) after some of the issues leaked to the media which he referred to as “gutter journalism,” adding that there was no Minister being probed, which only begs the question why the minister was quick to speak out on the issue, remember there is no smoke without fire.

In March 2021, President Museveni directed the Ministry of Finance to make a formal offer to Rowad Capital Commercial (RCC)- a Dubai based company to jointly invest in the new national telecom company with 60% shareholding going to RCC, and 40% shareholding to the government.

In addition to government’s equity contribution, the President directed that RCC- the Dubai based company would commit to avail a minimum of USD25m (Shs95b) within 90 days as working capital, and USD200m (Shs761b) for the network revamp in the new telecom during the first three years.

Museveni reasoned that it is this new company that would eventually make an offer to purchase the assets and business of the now defunct Uganda Telecom, which was under administration. The consideration for the acquisition of assets of the ‘old’ Uganda Telecom.

The consideration for the acquisition of assets of the ‘old’ Uganda Telecom meant that the finances generated would clear certain outstanding arrears such as Pension Claims amounting to Shs340b for former employees of the Uganda Posts and Telecommunications Corporation; preferred taxes amounting to Shs200b, UCC spectrum arrears of 2 percent levy amounting to Shs60b; Shs49.4b in loan arrears to purchase new equipment, and other outstanding administrative costs.

Museveni also directed Uganda Communications Communication (UCC) to issue a National Telecommunication Operators (NTO) license to the new telecom.

Following the President’s directives, everything went into free flow as the government negotiated shareholding rights with the new investor.

Inspite of President Museveni’s preferred investor – Rowad Capital from Dubai, another investor Axian Telecom from Mauritius emerged around April, 2022 indicating interest in the new telecom company, a deal which never materialized leaving Axian investors in frustration.

On the other hand, Rowad Capital Commercial faced serious scrutiny by the Financial Intelligence Authority (FIA). On 2nd June 2022, Moses Kantu, the Chairperson of Rowad Capital wrote to President Museveni requesting for a meeting to update him on the “impediments and unfounded technicalities” deterring the potential investors, according to an internal memo authored by Lt. Gen. Proscovia Nalweyiso on July 14th, 2022.

A review of a 2022 FIA annual report indicated that Rowad was among the 10 companies which underwent due diligence as part of an exercise for any company intending to partner with the government to undertake key investment projects, with a FIA report about the company submitted to the Ministry of Finance.

UTel is launched

On 17th August, 2023 government launched the new telecom at an evening dinner  held at Uganda Telecom headquarters in Kampala, an event that caught many unawares.

Amidst the merry making led by the Minister Anite, ICT Minister Chris Baryomunsi took to the podium to hint on an investment plan in which the government had made an initial Shs300b to attract other investors and partners on board.

Ironically, no mention of Rowad Capital Commercial was made at the launch of the new telecom even when government officials had an idea about the back-door negotiations going on.

A visibly excited Anite who had accomplished her mission of bringing UTL ‘back to life’ under her privatisation docket rallied Ugandans to use the company’s services in what she described as a new dawn to enrich  our company because it’s the national pride.

It should be remembered that between 2019 and 2020, Evelyne Anite and Bemanya Twebaze, the former Registrar General of Uganda Registration Services Bureau (URSB) clashed over management of UTL’s assets under administration with Anite accusing Bemanya of poor accountability while Anite was accused of insubordination.

It is against this background that a process to structure the new telecom company’s shareholding fell on the shoulders of Attorney General, Kiryowa Kiwanuka who was required to provide his legal opinion.

On Jan 4th, Kiryowa wrote to the shareholders of the new telecom after executing a Share Subscription and Allotment Agreement demanding that they meet a number of conditions within 90 days from the date of signing.

A Share Subscription agreement defines the relationship between shareholders and the company.The agreement safeguards the rights and obligations of the majority and minority shareholders, and it ensures all shareholders are treated fairly.

Some of the conditions included; delivery by the company and the current shareholders to Rowad of a copy of the relevant National Telecommunications Operator License issued by UCC under the Communications Act.

The license allows a telecom to conduct business legally and have a footprint at a national level.

The license allows a telecom to conduct business legally and have a footprint at a national level.

Delivery of a copy of special resolution of the shareholders passed under section 71 of the Companies Act, approving the alteration of the company’s share capital and creation of the subscription shares; negotiation and signing of a shareholders’ agreement.

Another condition required the negotiation and conclusion of a Government Support Agreement between government, Rowad and the company.