Peter Walubiri
4 September 2008
opinion
Kampala — In his "last word" titled "NSSF hostage to past deals," which was published in his newsletter of August 29, Andrew Mwenda postulated himself above other "reporters and journalists who make key decisions to these maters yet they are ignorant of the basic principles in such transactions."
For once we are dealing with a self-appointed "informed" journalist.
For over two decades as Registrar of Titles, law lecturer and advocate, I have interacted with public officials, lawyers, valuers, surveyors, land agents, vendors and purchasers of land and participated in numerous land transactions but I am not sure whether I can pass the Mwenda knowledge test.
It is implicit in Mwenda's opinion, and has been argued by many, that Arma Ltd (or Amama Mbabazi) was free to sell his land to NSSF. I agree and add that there was no need to hide behind a power of attorney, however legitimate. This is the centuries old principle which the lawyers call freedom of contract. Sir. George Jessel is perhaps the most quoted exponent of this principle. Writing judgment in 1875, he stated that "if there is one thing more than another which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty in contracting, and that their contracts, when entered into freely and voluntarily, shall be held sacred and shall be enforced by courts of justice."
However, freedom of contract is not absolute. The law declares certain contracts to be unenforcable if they are illegal or contrary to public policy. Since Mwenda agrees that "one can fill an entire newspaper with the irregularities in this purchase," suffice to say what he calls irregularities are actually illegalities that vitiate this transaction. Someday, some patriotic lawyers and statesmen will take up this aspect to its logical conclusion.
Mwenda indulges in the vexed question of market price and dismisses the opinions of valuation surveyors as not reflective of the market price. I do not know what this celebrated journalist read, but I at least know that opinions of valuation surveyors are not based on guesswork. Valuation surveyors are highly trained professionals who, as their daily tuff, advise clients on land values for various purposes. They have in mind the forces of supply and demand and as daily practitioners, they have the hindsight of comparable experiences. This is their specialty.
According to Mwenda, a market price "is the intersection between the demand and supply for an asset." I broadly agree. In this particular transaction, the demand was only from two sources. Akright had offered to purchase the land, but they could not come up with the money. The demand of Akright, good economists will tell us, was not "effective demand." It was no demand at all, especially when the supplier, as Mwenda admits, was under a lot of pressure to raise money to pay for shares in the National Bank of Commerce. Effectively then, there was only NSSF demanding for this land. NSSF had a bargaining advantage.
The question which NSSF directors and managers should squarely answer is why, if they had a desperate supplier of land, they chose to purchase the land of confusing acreage in an indecent haste and at a price well above three professional opinions and in breach of the PPDA laws when they could have negotiated for a much lower price. Was it a buy-now-or-die decision and why? Were these directors and managers acting free of influence?
NSSF directors and managers are not like owner directors in a private company who can gamble with their own money. They are public officials entrusted with forced savings of the workers of Uganda. They could have delayed the purchase and looked at other options. Temangalo is basically a rural bush with no infrastructure to talk about. It will take a lot of investment to have this infrastructure in place. That is why land nearer to the city with some infrastructure is a cheaper alternative as investment. That is why suave private investors rush for the more "expensive" land in Kololo, Nakasero and Bugolobi.
Lastly, it may be interesting to investigate further the shareholding of the National Bank of Commerce. What was the role of Governor Emmanuel Mutebile in this entire saga as shareholder (or former shareholder) of National Bank of Commerce and as supervisor of commercial banks? Has this bank been sold to foreigners after the transaction? There is a lot more to investigate.
The writer is a Kampala advocate
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