Gov’t now regains ‘full ownership’ of Uganda Airlines

Gov't now regains 'full ownership' of Uganda Airlines
Uganda Airlines acting CEO Ephraim Bagyenda

The government has, in a remarkable snap, allegedly regained the full ownership of Uganda Airlines Company Limited from the 2 shares owned just a day before to 2 million (100%) shares.

During the plenary session chaired by deputy speaker Jacob Oulanyah on Wednesday 23rd, minister of Works and Transport Monica Ntege Azuba said the ‘error’ in regards to the Uganda Airline’s ownership, has now been ‘corrected’ from government owning just 0.0001% (2 shares worth Shs 200) of the airline’s 2 million shares.

During debate of parliament’s Budget Committee report and a minority report yesterday, it was revealed that Uganda Airlines is 99.9 per cent privately owned by unknown individuals. The revelation became a national concern with several Ugandans on social media wondering who owns the rest of the 99.9% of the airline, and why taxpayers money was being used to revamp the airline where government is not the majority shareholder.

Azuba thanked the MPs for highlighting the ‘error’ in the ownership, adding that as of today, Wednesday, the airline is fully-owned by the Ugandan government with ministry of Finance and ministry of Works owning 50 per cent shareholding each. She insisted that not once has the soon-to-be revamped airline ever been owned by private individuals as alleged.

Azuba tabled several documents including a letter in which, during a curious extra ordinary meeting on March 26, 2019 in the ministry of Works boardroom, the company’s directors resolved to allot equal and full shares (2 million) to the founding members – ministry of Finance and ministry of Works.

“The Uganda National Airlines Company we have a return of allotment of shares which I beg to lay on table. The number of shares allotted – payable in cash is Shs 2 million, nominal amount of shares allotted is Shs 200 million. Amount paid or due per share is Shs 100 and all the shares are allotted.” Azuba told parliament.

“As of when, as of when Hon minister? As of when? When was this done Hon minister?,” asked Oulanyah.

“This, Rt Hon speaker, I want to thank members of the committee for having highlighted this and this has been corrected as of today [Wednesday March 27],” Azuba answered.

On Tuesday, the Budget Committee recommended the approval of Shs 280 billion supplementary budget being sought by government to purchase the first two Bombardier planes from Canada. However, opposition MPs Winfred Kiiza and Joy Atim Ongom, in their minority report, appealed to parliament not to approve the supplementary budget until government explains the ownership of Uganda Airlines.

“The share capital of Uganda National Airlines Company Limited is 200 million divided into 2 million shares. Of the 2 million shares, only 2 shares worth Shs 200 to minister of Works and Transport as well as ministry of Finance. This makes both ministries to be minority shareholders holding only 0.0001% of the shares. At the moment the owners of the 99.9% shares are unknown. The owners will only be determined when the directors decide to allocate the shores. It was asserted that the majority shares will be floated to the public,” Ongom’s report read.

Ongom also questioned the appointment of Secretary to the Treasury Keith Muhakanizi and Bageya Waiswa as directors of Uganda National Airlines Limited in their individual capacity.

Former Works and Transport minister Abraham Byandala warned that Uganda carries a huge risk in the national carrier unless it wields majority shareholding. The Katikamu North MP said only the Ethiopian Airways across the African continent has registered profits, emphasizing that majority ownership should be in the hands of the government.

Erute South MP Jonathan Odur also demanded for more information about the shareholders, alleging that there was conspiracy to commit fraud according to the information provided by the minister of Works.

Kassanda County MP Patrick Nsamba said that it is incumbent upon parliament that the revival of Uganda Airlines is done in an organized way for the benefit of Ugandans. He urged government to pick a leaf from Rwanda that owns 99% shares in Rwanda Air, Ethiopian Airlines which is 100% owned by government adding that it would be desirable for Uganda to own 99% shares.

“This is a new arrangement where agencies of government are owned by a ministries; that one ministry owns 50% and another ministry owns 50% when we have a fully fledged development company which caters for such. Uganda Development Corporation could be in better position to handle and manage this airline. We need explanations Mr speaker. Why is it that at this point in time were preferring ministry of Works, we’re preferring ministry of Finance to be the shareholders in this company and above all, the directors are individual members in their own names,” Nsamba said.

Arua Municipality MP Kassiano Wadri said that the attempt to revive the Uganda Airline has been tainted with confusion. He contested the fresh documents tabled by Azuba saying information from the Uganda Registration Service Bureau (URSB) indicated that Uganda only has two shares worth Shs 200.

“The minister has taken us by surprise, this is an investment which needs thorough scrutiny because at the end of the day, I look at it as a situation where the taxpayers of this country are being used to procure these planes over which we have no ownership. We have no ownership and not only that, even when you go to look at the business projection of this investment, the business projection is such that from 2019 – the year when we acquire this plane up to 2022, we’ll be registering losses,” Wadri said.

Adding; “And yet in transport business, when you have just bought a vehicle, the chances of this vehicle breaking down are minimal. Actually, you make more money in the first lifespan of this equipment than when it is old. And therefore the depreciation rate in the new years for these planes is so alarming. Are we really doing the right thing for this country?”

Oulanyah referred the new documents presented by Azuba to the Budget Committee for ‘thorough’ review. Committee chairperson Amos Lugoloobi asked for one day to review the documents and promised to report back to parliament on Thursday afternoon.

“Hon members the crux of our debate, the crux of the centre of the debate on this request which is in the supplementary expenditure no.2, the debate hinges on this issue of shareholding to know whether the people of Uganda are being taken for a big ride. Yesterday the committee reported that out of the 2 million shares, only 2 were owned by the government…and now were being told something changed. I would like to handle it this way that we give the committee time to look at it. I sense how it impacts on the earlier report but now we proceed with this matter,” said Oulanyah.