New Vision (Kampala)
Madinah Tebajjukira
4 November 2009
Kampala — THE National Social Security Fund (NSSF) lost sh23b in a Kenyan telecom company investment, top management has revealed.
The acting managing director, Martin Bandeebire, yesterday said in April last year, NSSF bought 238,200,100 shares from Safaricom, at sh44b hoping to make profits.
However, a fall in the price of the shares by 30% led to the sh23b loss.
Appearing before the parliamentary committee on commissions, statutory and state enterprises, Bandeebire revealed that the decision to invest in Safaricom was approved under the leadership of Edward Gaamuwa, who was the board chairman.
The new board chairman, Vincent Ssekono, told a committee chaired by Reagan Okumu that though NSSF incurred losses, the company retained its shares in Safaricom.
He said chances are high that the loss will be offset this financial year.
"The stock exchange is a gamble. Many people invest and get losses but they don't lose hope. That is business," Ssekono said.
He asserted that, the board would carefully scrutinise any other investment plans.
"This is a lesson, but we can't stop investing because the workers money needs to multiply," he said.
Ssekono's explanation angered the legislators who insisted that whoever initiated and approved the deal should be held responsible.
Ssekono said it was not only NSSF which made a loss but even other multi-international companies and individuals.
Safaricom's share price dropped in June at the time when most companies bought shares at Ksh5 but later dropped to Ksh3.5.
"I think it is going to take some time before we see the share price return to what it should be. We have to wait for stability to return to world stock markets," Safaricom chief executive Michael Joseph said.
He attributed the loss to the global economic crisis.
NSSF board and management had appeared before the committee to respond to management issues and to update them on plans to clean the fund's image.
During the same meeting, Ssekono told the legislators that NSSF has obtained the land titles of the controversial Temangalo land, but it had no plans to develop it in the near future.
Though it is not the mandate of NSSF to clear the sitting tenants, Bandeebire said the fund is still faced with the problem of the Temangalo tenants demanding compensation.
He noted that the fund was more interested in developing the 560 acres in Lubowa, which were considered to be more prime than the land at Temangalo.
In Lubowa, Ssekono said NSSF intends to construct 2,000 housing units for sale.
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