UGANDA, Kampala | Real Muloodi News | The lack of evidence regarding the government’s control over its stake in Munyonyo Commonwealth Resort Ltd (MCWRL) has become a focal point in government audits.
The audit, based on the 2022/2023 Financial Year auditor general report, highlights the absence of certification of shares for the government’s 25 per cent stake in MCWRL, an investment incurring a cost of over USh15 billion initiated 17 years ago.
The records indicate that the process of acquiring certification of shares, handled by Uganda Development Corporation (UDC), the country’s investment entity, is incomplete.
Auditor General John Muwanga noted that as of December 6, 2021, the transfer of share stock forms executed by the Ministry of Finance, Planning, and Economic Development were forwarded to the Uganda Registration Service Bureau for action, indicating an ongoing process.
Established in 2016, Uganda Development Corporation Limited Liability Company serves as the state’s investment arm, with MCWRL listed in Schedule 2 of the UDC Act as one of the companies in which UDC was required to purchase the government’s interest.
The government-owned shares were held by the Ministry of Finance, Planning, and Economic Development until 2022, when UDC acquired ownership as per the UDC Act, 2016.
Meera Investments Ltd (MIL), owned by Sudhir Ruparelia, partners with the government in MCWRL. However, the lack of share certificates has raised inquiries.
Sudhir Ruparelia, when questioned, did not respond to texts or calls. Steven Douglas Baryevuga, a communications specialist with the Uganda Registration Services Bureau (URSB), suggested that the delay might be due to the presence of multiple shareholders under a private equity agreement, requiring the submission of beneficial ownership data.
Concerns arise about the government’s commitment to monitoring MCWRL’s investment, with UDC revealing that MCWRL’s financial statements had not been audited for the preceding four years.
UDC’s Executive Director, Dr Patrick Birungi, informed the Committee on Trade, Tourism, and Industry that MCWRL lacked audited financial statements for 2019 to 2022 due to delayed government appointments to the Board.
Dr Birungi requested an extension of time for ongoing financial audits by external auditors UHY Thakkar & Associates.
The lack of audited financial statements hampered the Committee’s investigation into MCWRL’s unaudited financial statements.
MCWRL, jointly funded by the government and Meera Investments Ltd, was established to set up a conference facility for the Non-Aligned Movement (NAM) and G77+ China summits.
The construction, costing $4715 million (USh179 billion) as of April 27, 2022, was completed in January 2023. The lack of audited records raises potential threats to the state’s finances, with concerns about Meera Investments Ltd’s insufficient contribution towards construction.
The audit report indicates that the private investor, Meera Investments Ltd, underpaid its USh5.69 billion capital contribution, affecting the state’s right to participate or inquire into MCWRL’s business activities.
Despite the completion of the conference facility, the Auditor General’s office expressed concern about the potential harm to the estimated cost of construction, necessitating additional funding from the government.
UDC and private investors plan to leverage the convention centre for business, having established a marketing plan to host local and international conferences.
The completion of the facility brings the focus back to the outstanding issues related to share certification and financial audits, raising questions about the government’s oversight and commitment to safeguarding its interests in Munyonyo Commonwealth Resort Ltd.
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