Gov’t Sued over Distressed Company Bailout Plot

President Museveni addressing government leaders at Kyankwanzi on Tuesday

The dust raised by reports that Ugandan private companies were quietly lobbying government to bail out their struggling businesses is yet to settle.

The leaked list, medical which government dismissed as a concoction, viagra sparked public uproar with many arguing that poor management of resources and lavish spending could be the reasons behind the companies’ woes.
Approximately Shs 13 trillion is required to keep these private businesses afloat. There has been speculation that government bailout is a token in acknoledgment of the sponsorship given to President Museveni by these businessmen during the February general polls – a charge government has rubbished.
This Friday, a concerned citizen, a one Moses Musinguzi filed a civil suit at the High Court contesting the presumed government intervention to bail out 47 of these companies including individuals using taxpayers’ money.

The suit, a public interest litigation was filed through the plaintiff’s lawyer M/S Joel Olweny and Company Advocates.

Musinguzi accuses the indebted companies of jointly plotting to convince government to use revenue from taxpayers to pay for their liabilities owed to various financial institutions.

“The said payment (bailout) was confirmed by various government of Uganda officials at several events and in various correspondences, press conferences and documentation,” reads the charge.

“The first defendant (government) has considered and approved the said bailouts and intends to pay the said amounts to the said financial institutions to normalize their operations.”

In his suit, the plaintiff further accuses government of perpetuating “a string” of such “illegalities” in management of the state to the detriment of citizens.

“All adult citizens of Uganda carry out business and take financial risks and liabilities of all nature similar to these companies in a free market but haven’t received such a bailout and the actions and decisions of government to bail them out discriminates against all Ugandans on the ground of their economic standing and it infringes on their fundamental rights.”

Musinguzi, in his suit, further states that government can only draw or use funds from its treasury to deliver public services and pay public debt.

Unless government is barred from proceeding to financially relieve these companies, he says, “citizens will continue to be deprived of their hard earned property.”

While responding to journalists this week during the ongoing cabinet retreat at the National Leadership Institute in Kyankwanzi, the President noted that government intervention to salvage the frustrated companies will not necessarily be financial.

He however made exception to those companies that government owes payment in supplied goods and services.


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