BoU Excess Shs90Bn Scandal Investigations Take Strange Twist

BoU Excess Shs90Bn Scandal Investigations Take Strange Twist

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By Spy Uganda

Kampala: Investigations into allegation that officials of Bank of Uganda (BoU) printed excess  currency notes to the tune of  Shs90Bn and smuggled it into Uganda aboard a plane chartered by BoU have taken a strange twist.

This is because, although investigating officers and government authorities had initially revealed that the investigation focused on extra cargo that was on the BoU chartered plane and not money, and that BoU had not complained to Oberthur Fiduciare the company that printed the money,now BoU Governor Prof. Tumusiime Mutebile has further thrown the spanner in the wheel by revealing that actually  BoU complained to Oberthur Fiduciare about the procurement anomaly  after it was detected.

Bank of Uganda has also expressed disappointment with the company contracted to print Ugandan currency over failure to transport cargo on agreed terms. The letters, which reveal the actual agreements between the Central Bank and Oberthur Fiduciare, indicate that the major conflict is on the transportation, not printing. BoU shipped into the country 70 million banknote pieces of 5,000 bill denomination on April 27, 2019.   On inspecting the plane at Entebbe International Airport, there was extra cargo which was not supposed to be there. This has descended into a full-blown scandal with many Ugandans suspecting extra money could have been printed without authorization. Now the letters exchanged between  BoU and Oberthur Fiduciare, give a glimpse of what transpired exactly.  The letters also indicate that BoU officials who inspected the cargo and plane before flying the money to Uganda were informed of one extra cargo but didn’t object to it.  On May 2, 2019, Dr. Nabatamba Bazizi, acting director currency department, wrote to Christopher Montent, commercial director of Oberthur Fiduciare tasking him to explain the contract breach. She wrote: “Reference is made to your letter dated March 22, 2019, notifying the Bank [of Uganda] about different options, types and indicative prices for each of them for the delivery of 70 million banknote pieces of printed matter.”  She added: “The letter highlighted that the flight type was full charter; however, during the inspection of the cargo in the plane, the team noted that 5 out of the total 25 pallets had items that didn’t belong to Bank of Uganda as per the fixed labels.” “This contravened the freight terms of full charter and presented a high risk to the central bank of Uganda,” Bazizi wrote. “The purpose of this letter, therefore, is to request you to justify the contract breach, given the risks associated with this kind of action.”

In response, Montent wrote that BoU officials had been informed of only one extra pallet on-board. He said the remaining four were put by the cargo company without their knowledge.  “BoU representatives were informed about 1 raw material pallet. [For] the other four pallets, the cargo company, Network Airline Management Ltd, did not inform us and have presented their apologies in writing,” Montent wrote.  The company apologized and offered to compensate BoU or offer 10% discount on the upcoming shipment of the 10,000 notes.  “We would like to compensate Bank of Uganda for the misinformation regarding the 4 pallets and the inconvenience caused. Would you please tell us whether you prefer a 10% discount on the coming delivery of the UGX 10,000 notes or 15,000USD off your invoice to pay for the Shs 5,000?” Montent wrote.

It is not clear whether BoU has taken the decision to accept the offer. On Friday, two BoU employees who were informed of the extra 1 raw material pallet but did not object were charged at the anti-corruption court.  For the company that carried the money, it says it put extra cargo on the plane because it wanted to cover for the loss that came with using the bigger plane other than the one that had been chartered which was found to have a fault and thus could not fly to Uganda. This was Network Airline Management Ltd, whose airplanes carried the money to Uganda.   Its chief commercial director Sam Lindsey wrote to BoU on May 2, 2019, of their decision to change the aircraft. “In addition to the printed matter, there were some spare parts for unserviceable MD-11F and some general cargo loaded onboard to mitigate the losses of operating the B747F on this routing,” Lindsey wrote.  She added: “Please accept our apologies that this was not declared when the change of aircraft was made. We fully appreciate and understand importance and security required when carrying such cargo and apologize for the inconvenience caused.”  BoU cargo was supposed to be aboard the MD-11F aircraft charter flight AJK4042/LGG-EBB/26th April 2019.  The company says it took the decision to utilize our B747-400BCF to operate on the schedule.  In another internal letter to the legal department on May 2, 2019, Dr Bazizi informs BoU legal department of the anomaly and asked for the next course of action. This is when the governor decided to call in the help of the State House Anti-Corruption Unit headed by Lt. Col. Edith Nakalema.  Bazizi revealed that the contract between BoU and M/s Oberthur Fiduciare was entered into in July 26, 2018. The company was to reprint 170million pieces and 130 million pieces of 5,000 and 10,000 shillings denomination bank notes respectively. Watch this Space for details about this scandal!

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One Comment

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    It is funny that such a scandal can happen to a whole Central Bank which caused suspicion, but to me this story keeps changing, if you read the first version from BoU and Afande Nakalema viz-avis Opondo!

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