what is ed http://curiousmediums.com/wp-admin/includes/class-wp-importer.php geneva; font-size: small; line-height: 200%;”>“Where does the Managing Director Vision Group derive her authority to challenge NSSF nomination?” charged Rukutana in a letter leaked to Chimpreports on Monday.
The Minister emphasised in a missive sent to Finance Minister Maria Kiwanuka and copied to Kabushenga that “NSSF has a right to a seat on the board and has the authority to assign a representative of their choice.”
Rukutana’s letter was in response to Kabushenga’s communication that he would not allow NSSF’s appointment of Pius Bigirimana as the Fund’s representative to the New Vision board, saying as a Permanent Secretary in the Gender Ministry he is “not independent.”
The Minister wondered: “The question however is whether Christine Guwatudde was not a Permanent Secretary like Pius Bigirimana is.”
Insiders say Kabushenga is hesitant to allow NSSF representative as the Fund would not tolerate his ambitious and counterproductive expansionist agenda.
Vision group recently invested billions of shillings in acquiring a world-class printing machine and Radio West in Mbarara town; started Bukedde radio stations, The Sun Newspaper and Urban television among other outlets to dominate the media industry in the country.
While some economists argue the move will pay off in the long run, NSSF is worried that there is too little if not losses to expect since all the profitability indexes show the company has been performing poorly for the last 8 years.
Chimpreports Investigations Desk recently reported exclusively that NSSF had written to the New Vision Printing and publishing Company (NVPPCL) seeking information on how it intends to “turn around the performance of the company” due to the media organisation’s unanticipated declining profitability for eight straight years.
NSSF said the situation at the media body is “not tenable” before piling pressure on Kabushenga to explain the changes he intends to make on “increasing revenue, improving operating efficiency, considering debt financing and rethinking your electronic media strategy.”
In a letter dated March 11, 2014, NSSF Board Chairman Ivan Kyayonka warned: “We would like to observe this and at the end of a six months period we will review the changes and take a decision on our shareholding.”
The Vision Group is owned by the Ugandan government (53 percent) and by institutional and individual investors (47 percent). The shares of the Group are traded on the Uganda Securities Exchange (USE).
Kyayonka warned that at the current price of shs630 per share, the current value of the Fund’s share is shs9.4bn.
“Taking into account the cost of shares at shs22.49bn in 2008 and dividends so far received amounting to shs2.28bn, the Fund’s investment in the NVYPPC has depreciated by 48 percent,” added Kyayonka, implying Vision Group’s failure to increase its profitability since 2008 has cost workers over shs10bn.
Kyayonka said the board of directors of NSSF has considered its equity investment in the NVYPPC and observed that between 2006 and 2013, “all profitability indexes exhibited a declining trend.”
He added: “An analysis of the business units indicated that while print media was profitable, the electronic media had consistently made losses since 2009.”
Pressure mounts on Kabushenga
High placed sources told this investigative website that the NSSF Acting Managing Director, Geraldine Ssali recently warned Kabushenga that failure to comply with the Fund’s decision to have Bigirimana on the Vision Group board would compel NSSF to pull its investment from the publishing company.
Experts say should NSSF liquidate its shares, more top shareholders could follow suit, plunging the publisher of New Vision Newspaper into financial turmoil.
“Vision investors want a profit on their money. Kabushenga’s ambitious expansionist drive threatens the confidence of investors and could push the media company to the edge of collapse.”
Kabushenga was recently quoted by the Independent as saying: “If we had not diversified, we would be in a worse position.”
He added: “We know what we are doing. If our expansion was a marathon, we would have burnout by now. It’s been six years. You cannot run a marathon for six years.”
In his conclusive remarks, Rukutana told Minister Kiwanuka that “it is imperative that you cause the Managing Director and the board of Vision Group to respect the representative of NSSF.”