The Finance Minister of Uganda, Dr Ezra Suruma, in the documents submitted to investigating House committee stated that country’s President Yoweri Museveni oversaw the sale of Uganda Telecom Limited’s (UTL) shares to Libya in 2006, at a price below market value. For this reason, on February 26, 2006 the President met the Chief Executive of Ucom – a company incorporated in the British Virgin Islands and holding 51% of UTL.
In the written document submitted to the Parliamentary Public Accounts Committee (PAC) on November 18, 2008, Dr Suruma tried to distance himself from the deal; he also insisted that President Museveni discussed the sale of UTL with the BVI-registered company. Dr Suruma named the President as one of the persons involved in the deal after he was asked by the Committee to explain the sale of UTL’s shares for Shs25 billion.
In October 2007, PAC Chairman applied to Dr Suruma, asking why UTL’s shares were divested without advertisement and without independent valuations, so without enough transparency. Dr Suruma answered that the transaction was not a sale but a dilution of shares which arose from a capital call. He also said that during the State House meeting, it was decided that government should give priority to investments in the energy sector which needs it, and so it was not possible to raise resources for the telecommunications.
However, the PAC Chairman said that “As a minister, Dr Suruma should have advised the President on technical and policy matters of UTL sale without clear valuation…. we are not happy with this State House meeting and Dr Suruma should have known what to do before selling UTL to Libyans at a give-away price.”
The Ugandan public’s majority stake in the formerly wholly government-owned telecommunications firm UTL was acquired by the Libyan company Greencom through Libya Africa Investment Portfolio (LAP) agency – a billion dollar Libyan government instrument through which the government is spreading investments and influence across Africa. Greencom took over UTL in 2006 after acquiring the BVI-registered Ucom. Under the terms of the arrangement, the Libyan company would take over 69% of UTL, only 31% to be sold by the government on the stock exchange.
Dr Suruma told PAC that despite significant portfolio of UTL, the firm had reached a critical stage where it needed further substantial investments of approximately $86 mln to enhance its operations, so the shareholders approved raising of additional $26.4 mln from equity “in equal proportion to the shareholding (Ucom) raises $13.5 mln and government of Uganda $12.9 mln. The balance of $10 mln is supplier credit.”