UGANDA, Kampala | Real Muloodi News | Parliament finally approved the purchase of 150,000 preference shares in Roko Construction Company Limited worth UGX 202 billion amid protests and disagreements from a group of Members of Parliament against the proposal.
The Deputy Speaker of Parliament, Hon. Thomas Tayebwa informed the members of parliament on July 21 that Roko Construction executives had advised the construction company would cease operations if the proposal for the government to buy shares in the company wasn’t approved during the sitting.
However, when the Deputy Speaker tabled the matter before the house, some MPs raised the issue of lack of quorum, so there was no way the house could decide when the required number of people to vote was absent.
Because of the opposition from a section of members in the house, Hon. Tayebwa adjourned the meeting to another day.
Thereafter, a section of opposition members held a brief meeting with the opposition leader, Hon. Mathias Mpuuga.
These developments arose the day after the Speaker of Parliament, Anita Among, stayed approval of the proposed purchase of shares in Roko after the presentation of a report by the Finance Committee and a minority report by Butambala County MP, Muhammad Kivumbi.
Both reports had set out conditions for the government to meet before the proposal was approved.
One of the conditions set by the Finance Committee Report was that the Company should be audited before the share agreement is signed by the Auditor General.
“Whereas the committee is satisfied with Rokos own assessment and government’s assessment based on its interface with Roko and Rokos creditors, as condition precedent if this bailout is agreed, the committee strongly recommends that Roko should be expeditiously audited by our Auditor General. This would require that 800 million shillings are made available for this work,” said Hon. Keffa Kiwanuka, the Finance Committee chairperson.
In his minority report, Hon Kivumbi disagreed on issues like lack of due diligence, majority shares and equity, the risk of preferential shares, the court history of Roko, the selection of the Roko construction company and the untimeliness of the proposal.
“In the recent past due to failure to undertake due diligence, the same Roko Construction Limited with FINASI agreed with the government to construct a specialised hospital in Lubowa,” Kivumbi, who also doubles as the shadow minister for Finance recommended in his minority report.
“To date, no substantial progress has been registered and this prompted the house to reallocate UGX 319 billion that was proposed for promissory notes. This too reaffirms the need to contract a competent firm to undertake due diligence before the house pronounces itself on the proposal,” Kivumbi added.
After listening to all the recommendations in the minority report, the honourable speaker then said that the process of acquiring shares in a company or lending it needs enough regulation for the money to be safeguarded.
“Issues off due diligence must be done…in case you must decide that you are going to buy shares, that firm must be audited first. And this should not only look at Roko as the motion presented, lets look at other companies. We need to take precaution on all this,” speaker Among noted.
She then directed that the Minister of Finance presents to parliament all the companies that the government has bailed out and the procedures which were followed while doing so. She also gave the minister time to rectify the issues that had been raised by the MPs.
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