18 February 2013

Uganda: Kashaka Pinned in Sh4 Billion LC Bicycle Scam

Interdicted Permanent Secretary Ministry of Local Government, John Muhanguzi Kashaka caused loss to government in the LC bicycle importation scandal that cost over sh4 billion loss, court heard Monday.

The assistant superintendent of police, Umar Mutuya said he charged Kashaka with causing financial loss after he established that he approved payment to M/s AITEL.

When asked by state attorney Marion Acio why he preferred charge of causing financial loss against Kashaka yet he( Mutuya) said Kashaka did not fabricate documents, he answered " Because he approved payment after Bank of Uganda informed him that there were discrepancies in the document presented."

Kashaka's co-accused are; Henry Bamutura, the principal Accountant, Robert Mwebaze, Principal procurement officer, Sam Emorut Erongot, Assistant Commissioner for Policy and Planning, Timothy Musherure and Adam B. Aluma an Administrative Officer.

He said Kashaka should not have approved the payment since there were doubts raised by the Bank of Uganda.

Principal state attorney Jane Frances Abodo and state attorney Mario Acio are prosecuting the case. Didas Nkrunziza, Ateenyi Tibaijjuka, Mohamed Mbabazi, Geoffrey Komakech, Kato Sekabajja and Richard Mwebebazi are defending the accused.

Mutuya who investigated the case against Kashaka and his co- accused , said he caused financial loss by authorizing payment of US$1,719,454.58(about sh4b) to the purported supplier M/s AITEL, despite being warned by Bank of Uganda that documents presented by Stanbic Bank did not comply with terms for letters of credit.

Mutuya told the Anti- Corruption Court presided over by Justice Catherine Bamugemereire that there were glaring anomalies in the document presented for payment which should not have been ignored.

The witness said the evaluation process was also marred with irregularities in that the M/s AITEL had no joint venture agreement with Amman Impex as stated in the solicitation document.

Mutuya said the contract was sent for approval to Solicitor General before it was given to contract committee for approval. He (Mutuya) it should have been approved by the contract committee first before sending it to Solicitor General.

"This was another anomaly I established from my investigations" Mutuya said.

Court also heard that there was irregularity which allowed payment of 40% of the money on presentation of shipping documents instead of full payment on delivery of the bicycles.

Mutuya said the conditions for the final destination of the bicycles from the villages and parishes were changed to Kampala without consultation which he said was also an anomaly. The accused denied the allegations.

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