TANZANIA Revenue Authority has issued the Acacia Mining notice to pay the government close to 425.28tri/- (190 billion US dollars) being unpaid taxes, penalties and accrued interest from 17 years of operation in Tanzania, the mining company announced yesterday.

It said in a statement it has been sent a tax bill from the Tanzania Revenue Authority totalling around 190 billion US dollars for unpaid tax and penalties from its Bulyanhulu and Buzwagi mines in the country, which the London-listed company disputes.

The TRA claims a total of approximately 40 billion US dollars of alleged unpaid taxes and approximately 150 billion US dollars of penalties and interest owed, the mining company said.

It said however it disputes the assessments issued in respect of allegations of under-declared export revenue following findings of the First Presidential Committee announced on 24 May 2017 and the Second Presidential Committee announced on 12 June 2017.

“As we have stated previously, Acacia refutes each set of findings and re-iterates that it has fully declared all revenues…Acacia disputes these assessments. The Company is considering all of its options and rights and will provide a further update in due course.”

The Tanzania Revenue Authority (TRA) spokesperson, Richard Kayombo declined to comment on the reports saying they do not make public tax payers affairs.

“Tax payer affairs are not made public. We communicate directly with them,” he told the ‘Daily News’ over the phone.

Acacia Mining, the largest gold mining in Tanzania is locked in a bitter dispute with the government over allegations of undervaluation of their exports of mineral exports, tax evasion and operating illegally.

Acacia has refuted the findings and re-iterates that it has fully declared all revenues “and is still yet to receive copies of the reports issued by either of the presidential committees.

” Both subsidiaries, BGML and PML, have already referred these allegations to international arbitration. Shares in the company, at the London stock market are declining and according to Financial Times, the mining company dropped another 10 per cent on Monday after a series of analyst downgrades.

Acacia Mining owns and operates Tanzania’s three major mines — Bulyanhulu, Buzwagi and North Mara. Tanzania is Africa’s third-largest gold producer after South Africa, Ghana and Mali.

ANALYSISBy Ivan Okuda

Kampala — Uganda’s central bank is on trial. Real estate magnet Sudhir Ruparelia is on trial. Meera Investments Limited is on trial. The Judiciary, too, is on trial.

When Bank of Uganda (BoU) took over, put under receivership and eventually sold Crane Bank Limited, until recently billed one of Uganda’s big three banks, it would have been farfetched to envision a critical legal battle out of the fog of uncertainty that followed the sudden twist of events for one of East Africa’s moneyed businessmen, once tiered by Forbes magazine as East Africa’s richest man at $1.1 billion.

And yet, sure as night followed day, BoU managers and Mr Ruparelia, who have since October 2016 when the former took over the bank, have been in back and forth meetings with President Museveni chairing some.

At the heart of those meetings at least on the surface, was a win-win situation for both the central bank and the businessman.

The more the two sides met, the foggier the solution engineering got. The last meeting happened a fortnight ago at State House Entebbe.

Days later, local media was awash with headlines reporting a first in Uganda. The BoU had filed a case in the commercial division of the High Court against Mr Ruparelia and his investment arm Meera Investments Limited.

Case file HCCS No. 493 of 2017 (Crane Bank Limited (In Receivership versus Sudhir Ruparellia and Meera Investments Limited) is unique. First, it is the culmination of stalled talks between government of Uganda and Mr Ruparelia.

Uganda, like any other Commonwealth countries, has an adversarial court system. People sue after failing to agree. At times out of anger. Sometimes to blackmail. You either win or lose.

There is no middle ground as each side desperately makes moves to outsmart the other. For a businessman who had grown in his trade, almost attaining larger than life status, the case represents frosty relations between the businessman and the Kampala establishment, erstwhile two darlings.

On Thursday July 13, 2017, BoU, as Receiver of Crane Bank Limited and regulator of the banking sector announced it had sanctioned the filing of a suit against Ruparelia and Meera to recoup funds that, “were fraudulently extracted from, as well as losses that were caused to Crane Bank.

The suit seeks to recover a total of $93.8 million and Shs60.3 billion, together with the Freehold titles to Crane Bank’s branches, general damages, interest and costs”.

In this suit, the BoU instructed MMAKS Advocates and AF Mpanga Advocates (Bowmans Uganda) to represent Crane Bank.

Court filing fees of Shs398.2 million were assessed and paid to Uganda Revenue Authority.

It is good business for the lawyers but a trying moment for BoU which now finds itself embroiled in suits that punch holes in its own regulation.

This week, the central bank was dragged to court by a citizen, Mr Derrick Nsereko, who wants court to declare BoU officials culpable of statutory negligence and failure to comply with the Financial Institutions Act, claiming, “the central bank acted in bad faith, negligently and in breach of duties in giving the bank a clean bill of health”.

Bank of Uganda, in 1995, licensed Crane Bank to carry out business of a financial institution, only to shut its operations and sell it to dfcu in 2016.

A day before that National Bank of Commerce (NBC), owned by businesspersons, among others, former premier Amama Mbabazi, current prime minister Ruhakana Rugunda, retired Justice of the Supreme Court George Kanyeihamba and Amos Nzeyi, wrote to the deputy registrar, commercial division of the High Court requesting for the Sudhir file. They were given a copy of the voluminous file the next day and on Friday sued Mr Ruparelia and BoU.

In a way, the hunter is not only hunted, but also haunted by its past actions.

“Our clients have learnt that BoU, which revoked the NBC banking licence and sold its assets to Crane Bank on September 27, 2012, is now accusing its proprietors of engaging in serious bank fraud committed before and after the sale of NBC. Our clients believe that the rush take over, winding up, liquidation, closure and sale of NBC to Crane Bank without following the due process of law, is a continuation of and/or part of the fraud orchestrated by Crane Bank and its proprietor, which is the subject of the suit,” NBC lawyers Fred Muwema, Severino Twinobusingye and John Mary Mugisha said in their letter on Monday July 17, 2017.

In November 2016, after Crane Bank had been taken over by BoU, NBC shareholders protested against it being sold to dfcu, pointing to a petition they had filed in the Constitutional Court challenging the takeover of their bank and hand over to Crane Bank.

BoU ignored their protests and proceeded to handover Crane Bank to dfcu. They argue Mr Ruparelia and BoU are culpable for the loss and damage caused to NBC.

The closure of NBC is itself clothed in controversy and goes deep into the shadowy politics in Kampala. One of the reasons the case has not been cause listed, according to sources in the Judiciary, is what in Uganda is commonly called, “orders from above”.

The invisible above, whoever they are and whatever their interests, is not interested in seeing the matter disposed, sources say.

So this is a test for the courts. To hear or not to hear the NBC shareholders who for the last five years have been denied audience before court?

And yet, to settle the issues NBC raises now would be to once and for all settle their earlier plaint that, among others, challenged BoU’s closure, winding up and liquidation of the bank as well as Crane Bank’s takeover of the assets.

There are political calculations in there as Mr Museveni and his erstwhile political soul mate Mbabazi are yet to remove the barrier to an over 40 year comradeship fractured by the once all powerful minister’s attempt to pull the rug from under his commander in chief’s feet when he threw his hat in the ring in the 2016 general election.

He garnered 1.3 per cent of the total votes cast, lost a petition in the Supreme Court and has since retreated to his expansive Mukono farm, few kilometres from the capital and private work, often time at Crested Towers attending to private business, only watching from one of Kampala’s tallest buildings, the goings on in the country’s politics from his glass window before strolling back to his palatial Kololo home to imbibe what appears the waters of early retirement.

Some analysts argue NBC’s closure was tied to neutralising a possible financial muscle for Mbabazi’s presidency project and the case stalling is more political than case backlog, the standard explanation from the Judiciary.

The commercial division of the High Court, a fairly more efficient division, now has to deal with that reality too.

At the centre of this, however, is BoU. Unless Mr Ruparelia opts for an out of court settlement or the matter is resolved at mediation, now a key component and requirement of litigation as part of the Judiciary’s alternative dispute resolution model of settling civil disputes, the matter going to full blast trial is worth the bated breath.

“Much as Sudhir will be on trial, the Central Bank too will be on trial. It will be interesting to watch the defence Sudhir comes with and the witnesses that will testify,” veteran lawyer Peter Walubiri told Sunday Monitor in an interview on Thursday.

The Sudhir-BoU legal showdown is akin to, in more ways than one, the situation the Central Bank of Kenya found itself in late last year.

The Daily Nation reported that in December 2016 a complaint to the ethics and anti-corruption agency calling for investigation of Central Bank of Kenya governor Patrick Njoroge over alleged abuse of office filed by a law firm owned by Ahmednasir Abdullahi, acting for his Nairobi Law Monthly publication, raised questions about decisions the governor took on Imperial, Dubai and Chase banks, which had been placed under receivership.

By that time there were at least seven cases in court cross filed between Imperial Bank directors, shareholders, depositors against either the CBK, the governor, KDIC and the Capital Markets Authority. Out of this, only two rulings have been made with CBK appealing on one.

But Uganda is not Kenya. Sometimes, or just perhaps often time, scandals such as this can be well managed, if not choreographed with the controllers of the country’s political direction sitting back, watching the moves in the courts of law with a remote and changing channels to suit their needs.

When the multibillion shilling Office of the Prime Minister and Ministry of Public Service corruption scandals erupted a few years ago, heads rolled. But whose head rolled and how far appeared to be determined by forces beyond the court process.

Convicting the culprits who have since appealed, Justice Lawrence Gidudu asserted the fraud to steal Shs88.2 billion was hatched in the Public Service, smoothened in Finance ministry and executed in Cairo Bank where the money was finally paid out to ghost pensioners.

In either case, there were sacred cows on who the arm of the law’s reach was limited by politics. Large scale scandals like these are also a delicate meeting point between the law and politics.

How that balance plays out in the Sudhir-BoU case and the subsequent suits therein, will be an interesting space to watch.

What is true, however, is that the Judiciary in Uganda also finds itself on trial as it did in 2006 when four time presidential, Dr candidate Kizza Besigye challenged Mr Museveni’s election and nearly got an annulment by a difference of one justice.

Retired Justice Kanyeihamba has since recounted the delicate nature of that case and how the chips were down.

The direction the case takes could largely be shaped by the configuration of politics and the power play. How for instance, if BoU’s allegations are anything to go by, was the bank able to run for years with that rot? Add to that the National Social Security Fund (NSSF) too coming out at the last hour to bemoan how the bank was not complying with its statutory obligations to remit workers’ savings in the excess of Shs39 billion.

A senior manager at NSSF told this writer in an interview: “Sudhir was untouchable then and we couldn’t do much.” To be beyond the reach of such institutions is to be at proximity with the powers that be. What happened to that relation?

Mr Walubiri says: “I think it is important in the sense that it will show whether the Central Bank performed its duties well, and whether it can be trusted if there is a default to recover money because they authorised an audit when it went into receivership so this will be a test of how thorough the audit was. It is a very important case that will test if the standards set can be implemented.”

He adds: “One would be interested to know whether the bank was doing a good job at supervision, how did this take place without Central Bank’s knowledge? The audited reports the Central Bank apparently didn’t reveal everything that went on in Crane Bank. Was Ruparelia so skillful to cheat that much and go unnoticed?”

Ironically, the Central Bank office located at the heart of the capital, on Kampala road, is a spitting distance away from the headquarters of the once successful Crane Bank that spread wings to Rwanda.

If there was a stench at the bank, it would have accosted the nostrils of the regulator faster, being its closest neighbour, except if the power play insulated either side from the same.

The Ernest & Young case in which the audit firm attempted to block Kenya’s Capital Markets Authority from summoning it as part of its probe on accounting malpractices at Uchumi is instructive on how proactive the regulator can get.

Will BoU for instance, turn its guns on the audit firms that Mr Walubiri says gave it the impression all was well? The audit firms now find themselves in the dock too.

Releasing its financial statement, which was audited by KPMG in May 2016, for instance Crane Bank announced its paid-up capital stood at Shs210b, which was almost 10 times the BoU requirement of Shs25b. Shortly after BoU announced its financial health had become so feeble that it held less than Shs12b of the required amount. Who fooled who?

For now, Justice David Wangutusi, who will hear this matter, has a blockbuster case on his hands. The court has a chance to shape jurisprudence the way the Supreme Court in the USA did with the Lehman Brothers case.

The court could also shape accounting and audit practice as the USA court did with the Enron case.

The Enron scandal, publicised in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and dissolution of Arthur Andersen, one of the five largest audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganisation in American history at that time, “Enron was cited as the biggest audit failure”.

The courts have their work cut out. If that, however, will depend more on the politics than the facts and law remains to be seen in what promises to be one of the most important cases in Uganda’s recent civil litigation history.

Accusations

Fraud. BoU states that the property mogul fraudulently took out $92.8m (about Shs334b) and another Shs8.2 billion of depositors’ money from Crane Bank for personal gain.

Breaking the laws. The Central Bank submitted evidence showing that Mr Ruparelia had been violating the laws which had been put in place to regulate and prevent commercial banks from failing or collapsing.

Failure to make payments. According to the court documents, BoU accuses Mr Ruparelia of failing or refusing to remit morethan Shs52 billion in workers’ contributions to the National Social Security Fund.

By Green Muheya

The Blantyre Magistrate Court gave bail to former Minister of Agriculture, George Chaponda, alongside Director of Transglobe Export Produce Limited, Rashid Tayub.

Another accomplice in the case Grace Mijiga Mhango has today been granted bail by Lilongwe Magistrate’s Court after she was arrested in Lilongwe yesterday and spent a night at Lilongwe Police Station.

Senior resident Magistrate Shyreen Yona has granted the bail. Mhango, charged with forgery, was represented by Chrispin Ndalama.

The Anti-Corruption Bureau (ACB) on Wednesday arrested Chaponda, Mhango and Tayub for their alleged involvement in the dubious maize purchase from Zambia.

The trio were separately interrogated on Wednesday and spent a night in Police before being given bail on Thursday evening.

In Blantyre Senior Resident Magistrate Simeon Mdeza granted bail to Chaponda, 74 and Tayub nearly 6pm/

Defense attorney, Jai Banda, said he was happy that his clients were given bail and that the team is ready to defend the case that is scheduled to be heard from 9th to 14th August, 2017.

“Our grounds for bail application were that the two accused knew in the past that ACB is investigating them and never run away. They also have big businesses in Malawi hence no need for them to run away,” he said.

He continued to say “The condition for a bail is that they provide Mk200,000 bond cash each, K2 million non-sureties each, surrenders their travel documents to ACB, should report to ACB every fortnight and should inform the bureau whenever leaving Blantyre.”

ACB’s Deputy Director, Reyneck Matemba, said the bureau did not object to bail because they have finished their investigation which the suspects cannot tamper with it.

Matemba further said considering that bail is a right for everyone; the two also deserve to enjoy it as everyone can do besides the nature of the case.

“When the bureau arrested them, it had already finished its investigations and I don’t think they can tamper with any evidence that we have set as part of the case. The case will continue while on they are on bail from 9th to 14 of August, 2017. On the same case, the Lilongwe Magistrate court has also given bail to CEO of Grain Traders Association, Ms Grace Mijiga Mhango who was arrested in Lilongwe on Wednesday over the same issue,” he added.

Meanwhile Matemba said the bureau will consolidate the charging sheet so that all should answer their cases at one place.

Matemba said when the bureau called defense lawyers last week asking for their clients to appear before ACB, Chaponda and Tayub chose to appear in Blantyre offices while Mijiga opted for Lilongwe.

Chaponda, a former diplomat and lawyer, was sacked in February after he was implicated in a deal to import $35 million worth of maize from neighboring Zambia.

At the time, 8 million people in Malawi, nearly half the population, faced severe food shortages caused by drought.

Chaponda was placed under investigation following a recommendation by a presidential inquiry into the procurement deal. The inquiry found he had flouted procedures by hiring a private broker to import the maize, which is the main staple of Malawi.

He is also accused of sourcing the grain, in contravention of ministerial rules, for personal gain.

Corruption has been prevalent in Malawi’s public sector, and in 2013 several high-ranking officials were implicated in the “Cashgate” scandal, which involved large-scale looting of government coffers.

International donors pulled the plug on aid of around $150 million after auditors said at least $30 million was stolen from state coffers over a six-month period.

By Omololu Ogunmade

Nigeria — All things being equal, Nigeria will cease to import petroleum products and totally depend on its own refined products from 2019, the Minister of State for Petroleum, Dr. Ibe Kachikwu, disclosed this wednesday.

Kachikwu who made this disclosure while briefing State House correspondents at the end of the weekly Federal Executive Council (FEC) meeting at the Presidential Villa, said already, a steering committee headed by him and another technical committee had been constituted to fine-tune the process.

Kachikwu, who also said the council approved a new policy document on the operations of petroleum sector, further disclosed that a gas policy had earlier been approved by FEC three weeks ago to serve as the bedrock for Nigeria’s change of status as an oil producing nation to a gas producing country.

However, he said the new 100-page petroleum policy approved yesterday consisted of plans for the reorganisation of the Nigerian National Petroleum Corporation (NNPC) with a view to achieving efficiency and accountability; address salient issues in the Niger Delta; guarantee stability and consistency in the oil sector, and aid cash calls.

“Today, we took to council a Nigerian petroleum policy document. As you are aware, three or four weeks ago, we also considered the Nigerian Gas Policy. The essence of that gas policy was to focus increasingly on how to change the imperatives of seeing Nigeria as an oil producing country to a gas producing country because we are a lot more privileged to have gas than we have oil.

“Today’s document focused on oil. What are the imperatives for changing the policies in the oil sector? It dealt with certain fundamentals and some of the policies that we had already begun to pursue now crystalised in FECpolicy memo. For example, we are working assiduously to exit the importation of fuel in 2019. It captured the cash calls change which we have done which enables the sector to fund itself through incremental volumes.

“It captured the reorganisation in the NNPC for efficiency and enabled accountability. It captured the issues in the Niger Delta and what we needed to do as a government to focus on stability and consistency in the sector. It is a very comprehensive 100-page document that deals with all the spectrum in the industry. The last time this was done was in 2007 and it has been 10 years and you are aware that the dynamics of the oil industry has changed dramatically.

“Apart from the fluidity in pricing and uncertainty in terms of the price regime in crude oil, we are pushing for a refining processing environment and moving away from exporting as it were to refining petroleum products. That’s one change you will see. Secondly, how we sell our crude is going to be looked at. There is a lot of geographical market that we need to look at, long term contracting and sales as opposed to systemic contracting that we have been doing.

Those are the fundamentals. It is a document that if well executed, it will fundamentally take the change process that we began in 2015 to its logical conclusion hopefully in the next couple of years,” he said.

Giving a detailed breakdown of the planned stoppage of fuel importation soon, Kachikwu said 2019 timeline had already been set for the agenda and government was working assiduously towards meeting the target.

According to him, both the steering committee which he heads and the technical committee headed by the Chief Operating Officer of the NNPC, had had a series of meetings with individuals whom he said were prepared to invest in the project.

The minister said the plan was neither about the sale of refineries nor their concession but rather a financing scheme in which he said some groups would build the refineries while others would finance them, pointing out that at least 30 persons had already indicated interests in the financing scheme.

Kachikwu also disclosed that as a result of efficiency in the management of the oil sector, the daily consumption of fuel which he said used to be 50 million litres per day when he came on board in 2015 had now drastically dropped to 28 million litres per day.

“In terms of the specifics, what a policy document does is that it gives you a general guideline in terms of where you are headed, then you go into the specifics in other separate documents for the purpose of execution. If you take the 2019 timeframe for refinery for instance, it won’t tell you what I’m doing today but will tell you that I have set a timeline to exit importation and to get the refineries working by 2019.

“But if you ask me specially off the shelve, what are we doing on that? There is a steering committee already in place which I head. There is a technical committee team already set up headed by chief operating officer in NNPC. We have had series of meetings with individuals who are willing to put money into the refineries.

“I need to state this clearly. This is not a sale. This is not a concession. This is a financing scheme and there are over 30 people who have indicated interest in that financing. They are going to go through the usual due process mechanism to see who qualifies for that financing. What we have resolved however, which we have at least had a landing on is that each of the refineries would be repaired by the individual company that built the refinery.

“Who does the work is different from who does the financing. We are still dialoguing on who is going to get the financing opportunity but who is going to get the contracting opportunity to do the work is already decided. If you check the companies that built, I think it is Chioda in the North; Saitem in Warri if I’m not mistaken. I have forgotten the one in Port Harcourt but all of them have reached agreement with us in terms of willingness and readiness to do the work.

“Government is not putting money into this. It is going to be a sector-led effort and they will recover their money through incremental volumes that will arise from the production increase arising from the repairs. We are doing about 30 percent performances on most refineries now. So, if you get them to above 90 per cent template, we are going to use some of the product line to pay for some of the debts and free ourselves from the importation problems.

“All the refineries today repaired do not cover all our consumption. So, we are banking on the fact that some level of efficiency and upgrade will increase the refineries’ capacity. That is one. We are banking on the fact that the efficiency steps we are taking will reduce the consumption. We have gone from the 50 million litres per day consumption when I resumed office down to about 28 million litres per day,” he stated.

Also briefing yesterday, the Minister of Labour, Employment and Productivity, Dr. Chris Ngige, said FEC approved a new employment policy which encapsulates the current realities in the labour market.

He also disclosed that the new wage committee approved by FEC in May was yet to be constituted because some groups such as the organised labour and employment associations were yet to present their nominees.

“Today, the FEC received the National Employment Policy to guide this government. The last employment policy operating in Nigeria was approved in 2002. It is 14 years old and in that same 14 years, a lot of things have changed in the labour and employment industry and market. Things like employment for people with disabilities, decent work programme for people, doing jobs without polluting the environment and other aspects that are just new and contemporary in the labour market.

“So, this policy was reviewed in 2013 with technical assistance from International Labour Organisation (ILO) and the major stakeholders, the employers were involved, the unions, workers and of course, the government to crystalise this document which aims at giving decent jobs to people.”

He said: “Job creation is something that cuts across all sectors. It is multi-sectoral and not limited to even one ministry, not even limited to even the public service alone. The public sector is involved. The private sector is also involved. So, this document seeks to capture all these so that the relevant and affected persons will apply this so that we can apply this and fight unemployment and under-employment together,” Ngige said.

In her briefing, the Minister of State for Budget and National Planning, Mrs. Zainab Ahmed, said the council also approved National Social Protection Policy, which she described as “a framework which seeks to provide social justice, equity and inclusive growth, using a transformative mechanism for mitigating poverty and unemployment in Nigeria.”

According to her, some of the social investment programmes of the federal government such as homegrown school feeding, N-Power, and conditional cash transfers were drawn from the draft of this policy.

“So, what we had done is to submit to council the policy today and council approved the policy that is likely aspirational but which seeks to ensure that every Nigerian citizen has at least the minimum of what is required in terms of human development and human protection,” she stated.

Civil servants will have to wait for an unspecified period before they get a salary increase from the cash strapped government which is working on a remuneration framework being coordinated by the Office of the President and Cabinet.

This was said by finance minister Patrick Chinamasa during the presentation of the Mid-Term Policy Budget review Thursday.

Chinamasa said remuneration and benefits freeze are set to continue pending finalization of the new Public Sector Remuneration Framework.

“The office of the President is coordinating work towards the development of a consistent Remuneration Framework for boards and executive management at state enterprises, local authorities and other public entities that make a call on the fiscus.

“Current remuneration practices, inclusive of salaries, allowances and other perks, bear no relationship to performance across different entities.

“In this regard, a freeze on review of all remuneration and benefits is in place with effect from 1 January 2017 pending finalization of the new Public Sector Remuneration Framework,” Chinamasa said.

Chinamasa added that once the proposed frameworks have been approved, the Office of the President and Cabinet and the State Enterprises Restructuring Agency will assume the monitoring and evaluation role to ensure effective implementation.

In addition, Chinamasa said the wage bill was still too high and the government would continue to have restrictions on hiring and have continuous monitoring and audits to flush out ghost workers to reduce costs.

In 2016, employment costs amounted to US$2.63 billion from January to October, consuming 91 percent of the country’s revenue.

The government is, therefore, set to restrict budget expenditures to US$4.1 billion which represents 28.2 percent of the Gross Domestic Product (GDP).

A general freeze on prices, fees and charges by public entities is also set to continue unless justified and considered on its merits.

According to the minister, this will include charges on water, rates, power, local taxes and environmental requirements among others.

The government has a financing gap of US$400 million with revenue collections amounting to US$3.7 billion and projected expenditures of US$4.1 billion.

By Edwin Okoth

The government is set to let go of its shareholding in Uchumi Supermarkets once the troubled retailer stabilises under the ongoing bailout and restructuring plan.

Trade Principal Secretary Chris Kiptoo yesterday said the shareholding exit will come after the government recoups taxpayers’ funds pumped into the company over the years.

Uchumi is in talks with a strategic partner to pump in fresh capital after years of struggle supported by Treasury bailouts and debt restructuring.

“We are not planning to stay for so long as shareholders of Uchumi, so once it stabilises then we will move on to something else and let it grow on its own.

Winding-up suit

Our focus is simply to see the retailer back in full operations and that all stakeholders are taken care of,” Mr Kiptoo said in an interview.

The government owns a 14.67 per cent stake in the loss-making Uchumi and is the second-biggest shareholder behind tier III lender Jamii Bora, which controls 14.90 per cent of the retail chain.

Uchumi last year survived a winding up suit and is currently banking on a Sh1.8 billion Treasury bailout package, of which only Sh500 million has been released so far. The targeted strategic investor is expected to pump in Sh3.5 billion to help Uchumi better restock its shelves and meet supplier debts and loans to lenders.

“We are not adding our shareholding and we are very keen on due diligence before we disburse funds to Uchumi so that it does not get drowned again. We have a team carrying out compliance checks to assure us when we can release the next Sh1.3 billion,” said Mr Kiptoo.

He said the retail sector, which contributes up to eight per cent of the gross domestic product, had been weakened over time by failed self-regulations, poor management and lack of transparency at the privately-owned supermarket chain.

Uchumi, which had resorted to asset sales to ease its cash position, putting up for sale the Ngong Road branch, Lang’ata Hyper store, and a 20-acre plot in Kasarani — was declared insolvent in May 30, 2006 and subsequently suspended from trading at the Nairobi Securities Exchange.

The retailer was readmitted on the Nairobi bourse on May 31, 2011, having received Sh675 million from taxpayers in a recovery plan fronted by government, and a further conversion of supplier debts to equity.

The latest bailout plan from the government is the second one, underlining the critical role the government has played to keep the retailer afloat.

By Farirai Machivenyika

The Zimbabwe Land Commission is reviewing all land tenure systems in the country to ensure they promote investment and security of tenure. This is contained in the 2016 Zimbabwe Land Commission annual report tabled in Parliament on Wednesday by the Minister of Lands and Rural Resettlement Dr Douglas Mombeshora .

Zimbabwe’s agricultural land is predominantly under communal ownership, while resettled farmers under the A1 and A2 models own land through permits and 99-year leases respectively.

But farmers are facing challenges in accessing loans from financial institutions because the same banks are not accepting the permits or 99-year leases, arguing they are not adequate to guarantee provision of loans.

The Commission said during its tours countrywide, most farmers raised concerns on issues relating to land rights and security of tenure, succession and inheritance concerns, especially from widows, and conflicts with mining operations on agricultural land.

The Commission also said it had dealt with 62 disputes from eight provinces between July and December last year.

“The disputes involved the following main issues: land ownership, double allocations, sharing farm infrastructure, illegal settlers, boundary disputes, ownership of land upon divorce and inheritance, settlement by persons in grazing land, conflict of shrines and cultural areas, and lastly disputes between former farm owners and newly resettled farmers,” said the Commission.

The Commission raised concern on inadequate budget allocations after Treasury failed to allocate any funding for the envisaged land audit.

“The Commission compiled a bid for 2017 and came up with a budget request of US$24,3 million of which $16,3 million was for the comprehensive land audit programme, $5,1 million for recurrent expenditure, $2,9 million for capital expenditure and employment costs of $1,7 million,” reads the Commission’s report.

“The Commission was given an expenditure target of only $580 000 to cover $440 000 recurrent expenditure and $140 000 for capital expenditure. This resulted in a massive shortfall of $23,8 million, including the $16,3 million for the land audit of which no allocation whatsoever was made.”

By Tawanda Mangoma

Zimbabwe is set to become a regional hub for power distribution by 2021 following plans to start construction of a 1 000-kilometre power line next year in partnership with stakeholders from Mozambique and South Africa, an official has said.

Zimbabwe Electricity Transmission and Distribution Company (ZETDC) systems development manager Engineer Ikhupuleng Dube said the establishment of the power line would result in the construction of a mega power station in Triangle, that would distribute power to the region.

Addressing stakeholders, who included villagers, businesspeople and politicians at a consultative meeting in Mwenezi on Wednesday last week, Eng Dube said the power line would originate in Mozambique, pass through southern Zimbabwe and ends in South Africa’s northern Limpopo Province.

“We are rolling out construction work for a 400KVA power line with maximum capacity of carrying 1 740 mega watts,” he said.

“We are seated at the hub of the region, meaning power has to come through Zimbabwe and we are now establishing a super grid so that power from the north, east, west and south comes to Zimbabwe and then we distribute it to where it would be required.”

Eng Dube said construction work for the power line would start early next year. “In line with that, we are developing projects like Zisavona and Mozisa, which we are speaking about here,” he said. “On Mozisa, we are finalising technical studies by September this year and we hope to finish the Environmental Studies in 21 days.

“We are also doing financial structuring together with our partners who will be using the line, so that actual construction work can start early next year.”

Eng Dube said the project would be funded by the Development Bank of Southern Africa to the tune of $244 million. “We anticipate finishing construction work by 2021 because the longest area to be constructed will be in Zimbabwe,” he said.

“The line will be done in phases. First, we have the Orange Grove (Mozambique) to Triangle and that one has already gone to tender, selected a contractor and we have carried out contract negotiations.

“The second leg is between Triangle and Njelele in South Africa. We are finalising preparatory work. From Orange Grove to Triangle, we are talking about $134 million and a massive substation will be constructed in Triangle.

“As from Triangle to Njelele, we will need about $110 million.” Eng Dube said the project would result in some communities being resettled to pave way for the construction of the power line.

He said those affected by the construction of the power line would be compensated.

“In line with this ambitious project of building a 1000-km power line originating from Northern Mozambique, a corridor of 60 metres in width is required,” he said.

“We are going to compensate fully all those who will be affected by this development. “We will build houses, drill boreholes and compensate those whose farming activities would be interrupted during the actual construction work.”

Eng Dube said employment opportunities would be reserved for those in surrounding communities.

He said Zimbabwe was now working towards having power reserves.

ANALYSIS

In November 2016 a sorrowful Brian Molefe announced he would resign from Eskom “in the interests of good corporate governance” after the Public Protector proved just how chummy he was with Gupta Inc. Three months later Molefe received a controversial R30-million golden handshake… err, performance bonus. No, make that a pension fund payout. Because Molefe – Eskom’s CEO at the time – got retrenched. Or resigned. Took early retirement? No, was on unpaid leave. Yeah, we all got lost in the absurdity that stopped short of maternity leave. Thanks to a series of emails and documents leaked from the heart of Eskom, SCORPIO now clears the confusion. By PAULI VAN WYK.

Brian Molefe’s resignation “in the interests of good corporate governance” on 11 November, 2016, was a lie.

Newly leaked emails indicate that Molefe started planning the feathering of his retirement nest at least as early as a year before, in November 2015 – two months after he was employed by Eskom on a fixed five-year contract.