• Sun. Jun 11th, 2023

UGANDA, Kampala | Real Muloodi News | The National Social Security Funds (NSSF)’s interest in purchasing the Madhvani family’s Nakigalala Tea Estate has created controversy, as Labour Minister Betty Amongi probes the transaction deal.

For at least three years, the Muljibhai Madhvani family has been attempting to sell the almost 400-hectare tea estate to NSSF.

Minister Amongi accused NSSF Managing Director (MD) Richard Byarugaba of negligence of duty when he urged her to approve USh400 billion for the acquisition of the tea estate land, although the land was valued at USh246 billion by the Chief Government Valuer.

She also claims that he misled her when he said that the transaction had received approval from President Museveni, Finance Minister Matia Kasaija and the board.

“I requested him to avail me H.E the President’s directive, [Finance] and Boards approval, and Ministry of Lands, Housing and Urban Development valuation and land titles verification reports. He never availed them,” she wrote in her letter deferring Mr Byarugaba’s reappointment.

“When I inquired from the Board, the Board had not approved the purchase of the Land, Hon. Kasaija had also not approved it as a minister in charge of investment, and there was no directive from H.E.,” she said.

Officials from the NSSF allocated USh250 billion for the Madhvani land, USh120 billion for a separate purchase of land from the Naguru Police, and USh30 billion for any other suitable land.

“She is misreading the numbers,” an official said, asking to speak off the record given the sensitivity of the matter.

Nevertheless, Ms Amongi maintained that the NSSF officers “told me the 400 billion was all for the Madhvani land.”

Madhvani Land Disputes

In a due diligence report dated August 2020, the legal office Nangwala, Rezida and Company Advocates advised NSSF against purchasing the Madhvani land.

“All the pieces of land are subject to adverse possession and are capable of developing serious land disputes and possible litigation,” the report noted.

The report further stated, “the registered proprietor needs to first clear all the pieces of land of the adverse possessors before negotiations can commence. Acquisition of these pieces of land would require their being fenced off immediately with a fairly strong fence to bar further encroachment.”

The NSSF management requested in November 2020 that the board conditionally approve the purchase, subject to the resolution of any issues discovered during due diligence, adherence to procurement regulations, and receipt of a value estimate from the Chief Government Valuer. This request was rejected.

In a letter sent to Madhvani in December 2020, Mr Patrick Ayota, the NSSF Deputy MD, advised them of this viewpoint. Two months later, Mr Byarugaba sent a similarly thorough letter.

Madhvani’s lawyers, Kampala Associated Advocates, responded in a letter in March 2021, stating that the litigation filed by those claiming the land will not succeed.

When the Madhvani wrote to Ms Amongi in June 2022 to request her assistance, the situation once again sprang to life.

She then sent a letter to her Lands counterpart requesting a report on the land’s due diligence and a valuation from the Chief Government Valuer.

“The company intends to invest the proceeds from the purchase of the land to develop Amuru Sugar Works Limited where the government is partnering with them in ajoint venture,” she wrote.

She added, “Also avail me with the land title for Amuru Sugar Works Limited. This will help me to justify approving money from NSSF for the purchase of the company’s land at Nakigalala with a sound rationale.”

Sam Mayanja, the Minister of Lands, responded a month later.

“The due diligence conducted on the above land reveals that the four pieces of land belongs to [Madhvani] and that the lands are free of any claims or encumbrances,” he wrote.

He added, “I have enclosed copy of the Chief Government Valuer’s report which indicates the value of the above four parcels of land and also clears any issues related to any squatters, claims and encumbrances.”

Contrary to what the minister stated in his letter, the valuation assessment stated that minor areas of the land were “physically encumbered by bona fide occupants,” placing the estimated value of Madhvani land at USh246 billion.

Additionally, the report mentioned: “The subject properties are held under freehold tenure giving the proprietor good security of tenure. However, this office is yet to be furnished with a search statement in respect of plot 2 Busiro block 374 Nakigalala and has, therefore, relied on information obtained from the certificate of title availed. It is incumbent upon yourselves to undertake further due diligence to confirm ownership of the same before any financial transaction.”

Before he was appointed minister for Lands, Mr Mayanja was a partner in Kampala Associated Advocates, the law firm that was representing Madhvani in the transaction and he had acted independently.

“When I took on the ministerial post, to avoid this kind of situation, I resigned my position as a partner of Kampala Associated Advocates. I am no longer a partner,” he said.

He added, “I used to be a senior partner, but I realised that there could be cases there perceived as conflict of interest and I resigned. So now I have no conflict of whatever has happened there.”

Minister Sam Mayanja had previously responded to the letter from Ms Amongi with her in copy, but on September 29, substantive Lands Minister Judith Nabakooba also added her voice.

She added information on a legal battle for land ownership that had been decided in their favour in 2014 and reiterated the Madhvani ownership.

Despite receiving the other’s request in writing two letters, neither minister of lands attached the Amuru land title.

The transaction moved forward after receiving the go-ahead from the two lands ministers.

On October 25, 2022, Ms Amongi sent a letter to Byarugaba reiterating the five reports she had requested so she could release the funds: a due diligence report attesting to the absence of encumbrances; a report from the chief government valuer; approval from the finance minister; approval from the NSSF board; and clearance from the lands ministry.

The minister reported receiving approval from Lands and “the title confirming the total of [hectares] free of encumbrances” in addition to the clearance.

She claimed that the board and finance approvals were missing.

She made no mention of the due diligence report that she had requested, which, as was already mentioned above, had advised the Fund to proceed with caution.

Nevertheless, Ms Amongi gave Mr Byarugaba the go-ahead to proceed with the negotiations with Madhvani based on the report of the top government valuer and to then provide advice on a final price so that she could authorise a supplementary budget for the land.

Despite Ms Amongi’s claim in her letter dated December 7 that she was not given the value report, it is clear from her earlier letters that Minister Mayanja sent it to her.

Additionally, investigators are anticipated to look into the purported claims that the President had approved the transaction and that the deal’s revenues were intended to be reinvested in Amuru.

What Some NSSF Officials Had to Say

The current NSSF board members’ knowledge of the transaction and their level of familiarity with the prior board’s stance on the issue are also important factors in figuring out the facts of the case.

There was considerable pressure to complete the sale at this time, according to at least three separate officials who were aware of the situation and were contacted for this article.

“There was interest by some people inside and outside the Fund to close the matter and only NSSF has that kind of money to buy land of that size, so it was a make-or-break transaction,” an official familiar with discussions on the matter commented asking not to be named because of the sensitivity of the matter.

The Madhvani Group representatives declined to comment on the deal, its relationship to Amuru, or any conversations with authorities to further the deal.

Other Madhvani Land Claimants

There are certain issues with the land itself. Over the years, at least three distinct members of the Buganda royal family have filed lawsuits asserting ownership of the property.

A Criminal Investigations Department probe into allegedly fraudulent property transactions was put on hold in 2019 because Ministry of Lands authorities failed to make the necessary personnel accessible for an interview.

The claimants launched a last-ditch attempt to stop the deal when word spread that NSSF had finally been permitted to move through with the final discussions.

The Attorney General and the Uganda National Roads Authority, which purchased some of the lands for the expressway, received a letter from Mwesigwa Rukutana and Company Advocates, a law firm representing a group of claimants, a week after Minister Amongi’s letter, alleging that the Madhvani Group had illegally acquired the land.

They called their attention to an interim court order issued on October 19, 2022, prohibiting any sale or other transaction on the disputed land.

A week later, the Lands Minister received a letter from Birungi and Company Advocates, a law firm representing yet another group of land claimants, alerting her to an ongoing appeal over the same land that was presented to the Inspector General of Government in December 2021.

The deal had heated up by the time Ms Amongi sent her letter on December 7 accusing Mr Byarugaba of deceiving her.


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