Special Reports

The Inside Story: NSSF-Namirembe Land saga

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page http://communityvet.net/wp-includes/pluggable.php geneva;”>Details behind the acquisition of land, http://crewchiefpro.com/wp-admin/includes/admin.php LRV 791 Folio 5 Plot 434 in Namirembe, http://celiac-disease.com/wp-content/plugins/jetpack/modules/enhanced-distribution.php Kampala by NSSF in 2008 show that prior to the purchase the Fund valuers had settled for less than Shs650m which Jamwa paid for the plot.


Upon instructions of the Fund, values were made by Associated Consulting Surveyors, East African Consulting Surveyors and Bageine & Co Ltd for the amounts of Shs 370,000,000, Shs 550,000,000 and Shs 725,000,000 respectively.


However, according to a land sale agreement dated August 15, 2008 which Chimpreports has seen; Jamwa directed that Shs650m be offered to Charlotte Ssali, Norah Nalunbaale Ssali and Andrew Ssali, the administrators of the estate of the late Ephafulas George.


Ssali received Shs217m on her account number O1L6830175100 in DFCU Bank, Jinja Road Branch.


Lubaale’s payment of Shs 166m was deposited on her saving account number 014050447780 while Kabugo received his imbursement of Shs166m on bank account number O1L6005533600 in DFCU Bank Kimathi Avenue Branch.


Jamwa could not be reached by press time.


The balance of Shs100m was later paid to the trio upon NSSF’s successful acquisition of a freehold interest in the land and registration as proprietors.


The revelations come high on the heels of a whistle-blower’s report to the Inspector General of Government Irene Mulyagonja, calling for an investigation into the transaction for possible loss of workers’ funds.


REPORT

The whistle-blower alleges that this plot sold at Shs 650m after three years was against the auditors advice who proposed that since there was a claim that the plot had no access, the Fund should first take the option of getting access under the Road Access Act which makes it mandatory to acquire access in case your property has no access.


“It is very clear that the top managers had an interest in selling this plot because all the other transaction of selling un utilized plots were put on hold apart from this one and the transaction was hurriedly concluded during Christmas holidays when the Fund had closed business for that year, the contract was signed on 20th December 2012 to make sure that the parties who were against this transaction would find it concluded by the time NSSF opens for business for the new year,” the anonymous whistleblower reported.

Inspector General of Government Irene Mulyagonja


He further noted that the Corporation Secretary, David Nambale had “an interest and had to do whatever it takes to make sure that the plot is sold.”


The author of the dossier further alleges that it is on record that Nambale tricked the Chairman of the board, Vincent Ssekono, to sign the sales agreement after writing a memo to him advising him to give a go ahead to the sale.


“We are informed that the NSSF and Bank of Uganda Auditors were against the sale and even the Contracts Committee advised that the plot should not be sold but all this was ignored by the Managing Director, Corporation Secretary and the Chairperson of the board and the plot was sold at 650m which is 100m less than what it cost.”


Following these astonishing claims, Chimpreports last weekend carried out a comprehensive investigation.


Findings

The only indication of how the land may have been indentified for acquisition is contained in an internal memo date April 30, 2008 from Mary Biramahire, then a Branch Manager to the Acting Chief Operations Officer, then Francis Baryahabwa presenting her findings on the search for office space and identifying the land with a house for purchase at Shs 900,000,000.


At the time, NSSF purchased plots in different parts of the country to erect regional branch offices.


After a tour of different parts of Kampala and contacting brokers, Biramahire advised the Fund to purchase the land along Butiko Road (on the right hand side towards Sanyu Babies home) approximately 50 metres from the junction of Butiko Road and Albert Cook road in Namirembe.


A few weeks later, the Fund resolved to buy the land thus contacting the administrators of the land who later responded to the offer.


This website has seen a letter dated April 29, 2008 addressed to the Managing Director, David Jamwa from Ssali, Lubale and Ssali seeking an answer to their offer to sale the land to the Fund.


The offer sought a quick response and referred to the lapse of two months. Presumably the first offer was made on or about the month of February 2008.


At the time of offer, the land had not transferred into their names. The land was subsequently transferred into their names on the July 31, 2008.


Earlier on July 8 2008, a procurement requisition for the purchase of the land comprised in LRV 791 Folio 5 Plot 434 was raised by the Property Investment analyst, Keith Kalwegira and approved by the Chief investments officer and the Managing Director, Jamwa, on the same date.


On the same day a counter offer signed by Jamwa addressed to Ssali was made to purchase the land at Shs 650,000,000 down from the offer price of Shs 900,000,000.


It is important to recall that the Fund’s surveyors, Associated Consulting Surveyors, East African Consulting Surveyors and Bageine & Co Ltd had settled for the amounts of Shs 370,000,000, Shs 550,000,000 and Shs 725,000,000 respectively.

Former NSSF Boss Chandi Jamwa


Under normal circumstances, NSSF should have gone for the recommendation of Shs370m.


However, the land now comprised measuring 0.200 Hectares was purchased at Shs650m (exclusive of taxes vide agreement dated August 15, 2008.)


At the time of the purchase, the land was comprised in LRV 791 Folio 5, Plot 434. This folio was subsequently cancelled and the lease hold interest was merged with the freehold interest under FRV 415 Folio 13 on June 19 2009.


On August, 3, 2009, National Social Security Fund was registered as proprietor of FRV 415 Folio 13 Plot 434.


The Fund’s surveyors had also confirmed that the land had an access route to the public road.


The deal was sealed.


A few years later, Jamwa quit the Fund following intense public and media pressure over dubious transactions in the purchase of land in Temangalo, Wakiso.


Richard Byarugaba, an experienced banker was later appointed Managing Director of the Fund.


In a bid to cut operations costs, all plots which had been secured by the Fund to erect structures had to be disposed off as maintenance of regional offices was considered costly. Cars for staff were reduced and at least 100 employees were laid off.


Disposal

On May 6, 2010, Malibu Holdings Ltd wrote to the Fund expressing an interest in purchasing the land comprised in the Plot next to Plot 434 expressing that their understanding was that it belonged to National Social Security Fund.


The land bought by NSSF was being surrounded by Malibu Holdings property.


On May 31, 2012, Byarugaba requested for services of a government surveyor to carry out the boundary opening of the plot in a letter dated FA/CONF/431.


Despite earlier claims by surveyors hired under Jamwa’s reign that the land had access to the public road, surveyor Ronald Ssengendo reported on June 10, 2012: “The major problem with plot 434 is that it lacks a direct access road. The presumed access road i.e Butiko Road does not connect directly to plot 434 as there exists plot 436 between the boundary of plot 434 and Butiko road.”


He added that the other options – “plots 570 and others are private property owned by Malibu Holdings Ltd and therefore clearance from them would be required if an access road is to be created for plot 434.”

NSSF Main Building in Kampala


This put the Fund in tight corner. They had to find means of disposing of the land and at the same time ensure they don’t cause a financial loss.


Earlier on October 26, 2010, Malibu Holdings had written to NSSF expressing its interest in purchasing the land in issue at Shs 600m.


On January 14, 2011, NSSF wrote back to the company informing them that the Fund had reconsidered its position to sell the land to the highest bidder who may include Malibu Holdings Ltd and that as a public entity, the Fund is expected to follow due process of disposal as provided in the Public Procurement and Disposal of Public Assets (PPDA) Act.


On March 31, 2011, a disposal requisition form was raised by the Projects Team Leader and approved by the Managing Director for the disposal of seven parcels of land including the land in question whose value was estimated at Shs 650,000,000.


The Fund wrote to the Chief Government Valuer requesting for indicative market prices of seven properties including land comprised in FRV 54 Folio 14 Plot 434 Butikiro Road, Namirembe.


Six days later, the Fund wrote to the PPDA seeking advice on the disposal of several pieces of land which had earlier been earmarked for signature branch offices. The land in question was one of the seven pieces of land.


On May 2, 2011, the Executive Director of PPDA wrote to the Fund advising that the Entity should adhere to PPDA Regulation 296 and that the disposal of the seven plots should be conducted in accordance with Part IV of the PPDA Act and Division II of the PPDA Regulations which provide for different methods of disposal.


ACCESS

Subsequently, on May 25, 2011, the Fund wrote to the Chief Government Valuer requesting for realistic values of seven properties including Plot 434, Kibuga Block, Namirembe Road.


On September 15, 2011, the Fund wrote to the Deputy Director Physical Planning at Kampala City Council seeking confirmation on whether Plot No. 434 at Namirembe was encircled by other Plots with no access road.


The Director Physical Planning at Kampala City Council, George Agaba, on November 9, 2011wrote to the Fund confirming that after studying the accessibility patterns, the said Plot 434 had no direct access onto a public or private road and was surrounded by Plot 436 making it almost impossible to develop without creating a legal access out of another Plot.


The NSSF Deputy Managing Director, Geraldine Ssali then wrote to the Chief Government Valuer raising concerns about the delayed valuation of plots as requested in a letter dated May 25, 2011 and requesting for the process to be expedited.


The Fund also wrote to PPDA seeking a waiver to use direct negotiations method to dispose of Plot 434 Kibuga Block 4 Namirembe Road.


It was not until January 17 2012, that the PPDA wrote to the Fund granting a deviation to use direct negotiation method to dispose of Plot 434, Kibuga Block 4, Namirembe Road on the basis of the documentation submitted to it but advised that the Accounting Officer and the Contracts Committee remain responsible for ensuring value for money and for the conduct of the procurement in accordance with the provisions of the PPDA Act.


On February 9, 2012, the contracts Committee while considering a submission for approval method, choice of provider and negotiation team for the land by the PDU, deferred the disposal process until inter alia a valuation report from the chief Government valuer and independent valuers were obtained and authentication of the Board resolution to dispose of the land by the Corporation Secretary.


There, according to documents seen by this website, on February 10, 2012, the Head Procurement and Disposal Unit, Ellias Biryabaho, wrote to the Corporation Secretary, Nambale, seeking confirmation as to whether the Board had resolved to sell Branch Plots including the land at Bakuli.


Namable confirmed the authenticity of the Board Resolution on the advice of the Board Administrator.


VALUATIONS

So on March 22, 2012, the Ministry of Lands, Housing and Urban Development wrote to the Fund giving the market values of 5 plots including Kibuga Block 4, Plot No. 434, Butikiro Road Namirembe which was valued at Shs 600m.


Valuations of the land by Knight Frank (U) Ltd in May 2010 and SM Cathan Property Consult in May 2012 returned values of Shs 600,000,000 and Shs 615,000,000 respectively. Additionally, neither valuer advised that the land did not have access to a road.


With these valuations, on March 23, 2012 the Procurement and Disposal Unit made a submission to the Contracts Committee requesting for approval Plot 434 through direct negotiations.


The submission was signed by the Procurement and Disposal Unit boss, Ellias Biryabaho and indicated that a value of Shs 610,000,000 for the land had been has been returned by the East African Consulting Surveyors.


According to our investigations on March 26, 2012, the contracts Committee approved the direct disposal method for the land to Malibu Holdings Limited, the bidding document, Notice and negotiation Team. Additionally the Contracts Committee advised that the Fund’s ownership of the land be verified by the Commissioner for Land Registration.


Later on March 20 2012, a bidding document was issued to Malibu Holdings Ltd and their bid was returned on the April 2, 2012 for Shs 610,000,000.


After this on March 12, 2012, an evaluation report for land comprised in Plot 434 Kibuga Block 4 Namirembe Road was submitted to the Contracts Committee for a decision.


On April 19, 2012 negotiations were held with Malibu Holdings Limited with the objective to obtain a book value price of Shs 650,000,000. Agreement was reached between the parties to increase the bid to Shs 650,000,000.


The Contracts Committee subsequently approved the negotiation report and contract award recommendations to dispose of the plot to Malibu Holdings Limited at the price of Shs 650,000,000 subject to advice of the Solicitor General to proceed with the sale.


SOLICITOR GENERAL

By a letter dated April 28, 2012, Malibu Holdings Limited accepted the offer.


National Social Security Fund on May 18, 2012 submitted a draft contract to the office of the Solicitor General for advice in accordance with Article 119(5) of the Constitution.


The Solicitor General in a letter dated May 25, 2012 advised the Fund to clarify the description of the land intended to be sold and to obtain a resolution from Malibu Holdings Limited restricting the transfer of shares to non-citizens.


The Solicitor General also noted that the land had been described differently in different documents and that this needed to be clarified.


Subsequently, Malibu Holdings Limited availed the said resolution dated May 24, 2012 to National Social Security Fund and further on September 27, 2012 availed a copy of the amended memorandum and articles of Association in which there is a restriction on the transfer of shares to non-citizens.


LAST SURVEY

On May 31, 2012, the Fund wrote to the Commissioner Surveys and Mapping requesting a survey of the land.


Biryabaho, wrote to the Legal Counsel-Advisory Services clarifying on the correct description of Plot 434 Namirembe and a survey report was sent to the Fund indicating among others that Plot 434 lacks direct access to a road.


In a response to a letter from the Fund dated May 30, 2012 to the Ministry of Lands, Housing and Urban Development seeking clarification on whether its valuation of the land on the basis of leasehold had been merged has adversely affected the value returned, the Ministry wrote to NSSF Maintaining the value of Shs 600,000,000.


Audit issue

The investments Department in reaction to an audit issue regarding the disposal of Plot 434 Namirembe wrote to the Head PDU advising that the price of Shs 650,000,000 was below the cost of the plot by 56,170,001 in nominal terms and Shs 814,000,000 in real terms (if the time value of money at the IRR for real estate projects of 20 percent were reconsidered).


On August, 14, 2012, the Head of Internal Audit forwarded an Audit Report dated 15th February 2012 to the Chairperson and Members of the Audit, Risk Assurance Committee of the Board in which he recommended that the Head PDU and the Accounting Officer should revisit the decision to dispose of Plot 434 with a view of realizing value for money.


But on August 20, 2012, the Contracts Committee rejected a request for the renegotiation of the price for Plot 434 Namirembe from Shs 650,000,000 to Shs 814,000,000 on the grounds that the price of Shs 650,000,000 had already been communicated to the bidder and the proposed price of shs814,000,000 was abstract and not supported by any valuation to guide negotiations.


SEALING OF THE DEAL

Frustrated by the delays, on September 20, 2012, Malibu Holdings Limited wrote to National Social Security Fund raising concerns as to why the sale agreement was not being concluded.


The following day, the Board of Directors at their third meeting directed management to explore the possibility of getting access to the Fund’s property on Plot 434 at Namirembe and it was resolved that the sale of that plot to M/S Malibu Holdings Limited pend the resolution of access to the property.


On September 27, 2012, the Managing Director following a request for guidance from the Attorney General, Biryabaho stated that the land would only be disposed of if the buyer could raise the price up to Shs 814,000,000.


Byarugaba on November 6, 2012, gave a go ahead to sell the plot to the highest bidder (Malibu) in response to a request by the Attorney General and Biryabaho to have a final decision made on the disposal of the land.


As things neared a stall, the Fund wrote to the office of the Solicitor General submitting the resolution from Malibu Holdings Limited restricting the transfer of shares to non-citizens and a letter from the Ministry of Lands, Housing and Urban Development dated July 20, 2012 reaffirming the valuation of the land and confirming the description as FRV 415 Folio 13.


So on November 23, 2012, the Solicitor General cleared the sale agreement for the land at Shs 650,000,000 for signature.


Three weeks later, the agreement for the sale of the land comprised in FRV 415 Folio 13 Plot 434 was signed and on December 21, Malibu Holdings paid the Purchase price of Shs 650,000,000 by EFT to account No. 0110005004 held by the Fund in Citibank.


The deal was concluded on January 3, 2013 with Biryabaho, on behalf of the Fund, handing over the Certificate of Title and the signed transfer forms to one Umesh Basnet who was nominated by Malibu Holdings Limited to receive the same on their behalf.

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