By Martin Luther Oketch & Eronie Kamukama
Kampala — Thieving and other fraudulent practices by employees alongside a mountain of debt weighed down Uganda Telecom (UTL) and stymied its operations, a senior executive revealed yesterday, a day after the government took over the business.
Mr Mark Shoebridge, the UTL managing director, said “this company had the problem of fraud and theft of money that was being executed by some people internally.”
He provided no figures of the losses to the firm as a result of inside pilferage since 2008, but said the fraud had reduced by 53 per cent over the past year when he took charge.
Hours after the revelations were made at a press conference, state minister for Privatisation Evelyn Anite, said the Auditor General’s office, on her request, has commenced financial, technical and institutional audit of UTL following an initial hesitation. The auditors were reluctant to carry out the audit in order to avoid duplication since Parliament is yet to conclude its inquiries into allegations of fraud and impropriety at the company.
The Libyan government, through Ucom Ltd, in 2000 bought 51 per cent of UTL shares, reducing the government to a 31 per cent minority shareholding.
The Libyans, however, walked out of the business — its five representatives on the board stopped funding and all resigned — as Parliament’s select committee closed in on the suspected culprits.
Minister Anite confirmed yesterday that the Libyans formally notified the government of their withdrawal, but did not say whether the government raised any objections or sought alternative ways to recover lost monies.
“UTL is now under [full control of the] government,” she said, referring to a decision that Finance minister Matia Kasaija said a day earlier paves the way for a new strategic partner to inject capital, technical and managerial expertise.
Mr Shoebridge told a press conference in Kampala earlier yesterday, that UTL last invested in infrastructure upgrade in 2007 and the technology and equipment have become obsolete and unreliable for high quality services amid growing telecommunications sector competition.
Being formerly a part of a government parastatal, the Uganda Posts and Telecommunications Corporation, enabled the entity have physical foothold with 480 towers across the country and managing fixed telephone lines for government ministries, department and agencies.
Poisoned chalice
In many ways, bureaucrats rely on UTL as principal telecommunications services provider, and particularly State House and security agencies.
That opportunity unexpectedly turned into a poisoned chalice, and the company is presently demanding Shs18b from government clients.
With 700,000 subscribers, UTL ranks among four biggest telecommunication service providers in the country, although other private players — to which it owes substantial monies in interconnection fees — eclipse its clientele.
These woes yesterday made it a subject of discussion in Parliament, with the company’s board chairman Stephen Kaboyo telling lawmakers that Uganda Revenue Authority on Monday, this week, “seized Shs1.1billion shillings from the UTL account”.
UTL has a total debt portfolio of Shs100b, he said, and requires a minimum $48m cash injection to upgrade the infrastructure and revamp its business that employs 500 people.
Part of the company’s tribulation was that its operations were being directed off-site by majority shareholders based in Tripoli, Libya, and with less consultation and blind to business realities on the ground. However, Mr Kaboyo said during the course of 2016, UTL’s business performance improved by 53 per cent, the best position the company has enjoyed in as many years.
Ucom’s rocky business marriage in Uganda was unsurprising to industry insiders. The firm encountered similar headwinds in both Zambia and Rwanda where its businesses went burst, and it has a foothold only in Ivory Coast.
UTL’s current top managers include board chairman Kaboyo, managing director Shoebridge and government representative Moses Mwase; a director in the Privatisation Unit.
Downsising
Mr Kaboyo hinted that the firm, which hopes to conclude business rescue and revamp talks with the government over the next couple of months, will likely downsize, raising the spectre of possible staff sacking in a distressed economy. “Going forward, he said, we need to take a look either ways: downsizing the number of staff or increasing the number of staff but it is not going to be immediate that people are going to lose jobs.” he said.