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Witness reveals more rot in Eutaw road bid

Former Works minister Abraham Byandala

All Housing Finance bank documentation submit- ted by Eutaw Construction Company to win the botched contract for the Mukono-Katosi road construction was forged, a prosecution witness told the Anti-Corruption court on Tuesday.

Paul Niwagaba, the head of business banking at Housing Finance bank, told Justice Lawrence Gidudu that the bid security documents allegedly issued by the bank were forged with the connivance of a low-ranking official. In the ongoing trial, Abraham Byandala, the former minister for works and transport, is charged with abuse of office, disobedience of lawful orders and influence peddling.

His co-accused include, former Uganda National Roads Authority (Unra) staff Ssebbugga Kimeze (former acting executive director), Joe Ssemugooma (former acting director of finance and administration) and Marvin Baryaruha (former legal officer).

Apollo Senkeeto, who introduced himself as the country representative for Eutaw Construction Company, and Isaac Mugote, a former Housing Finance bank employee, are accused of helping the company to forge the bid security documents used to win the contract.

According to Niwagaba, the bank did not issue the performance guarantee worth Shs 24bn.

“Eutaw opened an account [with Housing Finance] on December 23, 2013, and the performance guarantee was issued on the same day,” Niwagaba said, adding, “this is not possible because clearing such a transaction normally takes a week.”

Led by prosecutor Sarah Birungi, Niwagaba said at the time, it wasn’t legally possible for Housing Finance bank to issue a performance guarantee worth Shs 24bn.

“The Financial Institutions Act of 2004 was very strict. It stipulated that a bank like Housing Finance couldn’t give a performance guarantee beyond 24 per cent of its capital,” Niwagaba said.

“In 2013, Housing Finance bank had a total capital of Shs 82bn,” he added. Niwagaba said Eutaw’s forged performance guarantee was sanctioned by Mary Nyende Kansiime, a bank official who had no mandate to do so.

At the time, Niwagaba added, Kansiime was the bank’s head of corporate banking. He said such powers resided with the managing director or executive director with the help of the company secretary.

“When you look at that document [performance guarantee], it is in smaller fonts,” he said.

“Yet official documents from Housing Finance bank are normally in large fonts. That couldn’t have been our document,” he said.

Niwagaba said another forged performance security document worth Shs 16bn was issued to Unra, allegedly by Housing Finance bank in support of Eutaw’s bid. Niwagaba called this a fraud because it was issued on November 21, 2013 yet Eutaw opened an account with the bank on December 23, 2013.

“The document was issued before Eutaw was our client; that is not possible,” Niwagaba said. “We only issue such [documents] to our clients,” he added.

According to Niwagaba, the fraud was orchestrated by Kansiime who used a fake stamp and seal of the bank. Intrigued by the numerous mentions of Kansiime, Justice Gidudu asked if she was still working at the bank.

“She resigned after she got an alternative employer,” Niwagaba said. “The last time I heard of her she was employed at DFCU [bank],” he said.

But Gidudu shot back in his brutally-frank style.

“The reason why I’m asking a lot about her [Kansiime] is because I don’t see her in the dock. She should be here with these ones [suspects],” Gidudu said, drawing laughter from the courtroom.

Justice Gidudu asked Niwagaba to explain how Unra or any other institution could tell a genuine document from Housing Finance bank.

“They can write to the bank asking if the document has been approved or they can make a call to that official who sanctioned the document,” Niwagaba said.

That prompted Justice Gidudu to again sarcastically ask, “In this instance, Unra called Kansiime to ask if she had sanctioned the documents. And she said yes. What would you have expected of her to say?”

A subdued Niwagaba replied: “That’s the method of verification that we have at the bank.”

Government ombudsman Irene Mulyagonja suspended the Mukono-Katosi road contract after discovering irregularities in the award of the tender. By that time, Shs 24bn had been advanced to the company.

dkiyonga@observer.ug

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