16 March 2013

Uganda: Sacked Employee Sues Registration Body

A senior official of the Uganda Registration Services Bureau (URSB), who was recently fired over alleged corruption, has sued the bureau. In her suit filed at the High Court in Kampala, Maudah Atuzarirwe, the director of business registration, argued that her dismissal was done 'illegally and irregularly.' The bureau, its board and chairperson, and the Registrar General are named as respondents in the suit. Musumba is chairperson of the board.


The URSB board, led by former regional cooperation minister, Isaac Musumba, terminated Maudah's contract last Friday, citing a February internal audit report that implicated her in falsification of documents used to register private companies.

"On 5th March, 2013, the board considered an internal audit report on the matter of non-tax revenue collection. You were implicated in aspects of alleged fraud and financial impropriety. In view of that report, the board has decided that your probationary appointment be terminated with immediate effect," reads her termination letter.

Minister intervenes:

Maudah petitioned justice and constitutional affairs minister, Kahinda Otafire, who wrote to the board asking it to stay the decision. The URSB board is supervised by the minister.

In his letter to the board dated March 7, 2013, Otafire stated: "It has come to my notice that the said decision made by the board is unacceptable since she has not been given a fair hearing and needs to be given an opportunity to defend herself in accordance with the rules of natural justice and the provisions of the constitution of the Republic of Uganda."

"I therefore, hereby suspend your said decision with immediate effect and direct that Mauda Atuzarirwe be reinstated in her position until a proper and thorough investigation has been carried out by a competent body and disciplinary action may be effected if such recommendation is arrived at," wrote the minister.

Audit findings:

The internal audit report, a copy of which was seen by the New Vision, cites financial irregularities in registration of private companies that increased their share capital. The audit report which covers the period between September 2012 and February 2013 shows that several companies under-declared tax returns on increase of share capital. It claims that staff colluded with companies to register them before paying the required fees, leading to the loss of Government revenue.

Of the 32 companies selected for the audit, none of them was found to have satisfied the required approval process, the report states. "We were able to unearth fraudulent transactions where registrations were completed without the mandatory fees paid, more over with even forged receipts from one of the partner banks," the report partly reads.

In one of its findings, one company, Garden City Casino Ltd is shown to have increased its share capital by sh4b in November 2012, which attracted a sh22m charge. However, only sh2m was remitted to the bureau. Another company, Sadolin paints (U) Ltd was said to have increased its share capital by sh2.8b in November 2012, attracting a sh15.4m charge. The audit says only shsh1.4m was paid.

Out of sh165m charge meant to be paid by Imperial Group of Hotels Ltd for increasing its share capital by sh30b on February 2, 2013, only sh20,000 was reportedly paid. An additional sum of sh15m was reportedly paid later when the audit was started.

Maudah is implicated in the transactions, although she denied having a hand in the transaction, the report says. When contacted, Maudah denied the allegations. "The allegations are false. I am not an accountant and I don't issue receipts. Why hasn't the bureau involved URA and the Police to investigate me if the alleged audit implicated me?" URSB was established in 1998 as a department under the ministry of justice, before it later became self-accounting in 2010.

It is responsible for registering and checking details of a company and issuing birth certificates, and acts as an agent of URA in the collection of stamp duty. Cases of delays have previously been reported at the bureau, among them checking company details and acquiring certificates of birth, marriage and other documentation.

The institution has, however, improved performance and revenue collections have risen from sh250m to sh1.5b monthly in form of non-tax revenue since a new board and management came into office in December 2011.

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