Indictment of Gilbert Bukenya(Former VP of Uganda)

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA

(ANTI-CORRUPTION DIVISION)

iNDICTMENT

\ (Under S.168 and 169 of the Magistrates Courts Act)

The ... )1r-J ...... day of ...... ~~ 2011, at the sessions holden at Kampala on the .... :?C, ... day of ...... ~~ .. 2011, the court is informed by the Inspector General of Government that PROF. DR. GILBERT BUKENYA is charged with the following offence:

COUNT STATEMENT OF OFFENCE

ABUSE OF OFFICE, contrary to section 11 of the Anti Corruption Act, 2009.

PARTICULARS OF OFFENCE

PROF. DR. GILBERT BUKENYA being a person employed as Vice President in the Government of the Republic of Uganda and Chairman of the Commonwealth Heads of Government Meeting (CHOGM) Cabinet Sub-Committee, on various dates between December 2006 and November 2007 within Kampala district did unlawfully and high handedly direct to be done arbitrary acts prejudicial to the interests of the Uganda Government, in abuse of his office; to wit; influencing and directing the award of the Contract for Supply of Executive Vehicles intended for use during Commonwealth Heads of Government Meeting (CHOGM) 2007, to Motorcare (U) LTD in total disregard of the laws, regulations and practices governing Public Procurements in the Republic of Uganda.

I Sydney Asubo, Director Legal Affairs, Inspectorate of Government Officer Preferring Charges

To: PROF. DR. GILBERT BUKENYA

TAKE NOTICE that you will be tried on the above indictment at the session of the High Court to be holden at Kampala on the ...... day of ...... 2011 at ...... O'clock in the forenoon or so soon thereafter.

Registrar Anti-Corruption Division Kampala

> THE REPUBLIC OF UGANDA

IN THE MAGISTRATES COURT AT KOLOLO

{ANTI-CORRUPTION DIVISION)

CRIMINAL CASE NO. HCT-00-ACD-00-CSC-94/2011

UGANDA======PROSECUTOR

VERSUS

PROF. DR. GILBERT BUKENYA ======ACCUSED

SUMMARY Of THE CASE

(Under S.168 of the Magistrates Courts Act)

The Inspector General of Government (hereinafter called the Prosecution) shall adduce evidence at the trial to prove the following facts:

1. The Government of Uganda hosted the Commonwealth Heads of Government Meeting (CHOGM) from 23rd -25th November 2007. As a host Country, the Government of Uganda was mandated to put in place facilities that meet requirements of the Commonwealth Secretariat which were in accordance with the specifications contained in the Guidelines (Blue Book) and the Budget on the organization of CHOGM.

The Ministry of Foreign Affairs was mandated to coordinate all CHOGM preparatory activities and was entrusted with all the funds to finance and implement the CHOGM activities.

1 \'

2. In the Organisational Structure for CHOGM preparations, the Cabinet constituted a Sub-Committee to provide among other things overall policy framework to the National Task Force whose mandate was to coordinate and plan the preparations for CHOGM 2007.

The Cabinet Sub-Committee was chaired in most cases by the Vice President of Uganda, H.E. Gilbert Bukenya (now the accused) except when the President of Uganda H.E. Yoweri Kaguta Museveni attended the meetings in person. The decisions of the Cabinet Sub-Committees in regard to CHOGM activities were final. In the absence of the President and the Vice President, the meetings were chaired by the Minister of Foreign Affairs, Hon. Sam Kutesa under whose ministry the overall preparations and funding for CHOGM 2007 fell.

3. Under the National Task Force, one of the Sub-Committees was the Transport Sub-Committee delegated to the Ministry of Works and Transport (MWoT). One of their tasks was to make arrangements for transport and related services.

4. THE BIDDING PROCESS:

The Tender for the provision of transport and related services was advertised by the MOW&T in the media on 31st May 2006; bid opening was to be held on 17th may 2006 at 11:30 am. 23 firms bought the bid documents.

However, before the closing date and bid opening, the Cabinet Sub-Committee on CHOGM in the meeting of 11th July, 2006 halted the bidding process.

On 14th July 2006, the Permanent Secretary Ministry of Works and Transport communicated to the bidders extending the bidding period indefinitely.

The major reasons for halting the process were given as the need to review numbers, specifications and cost implications in order to find a cheaper option that would fit the budget. The Sub Committee meeting of 14th September 2006 reviewed and approved the types and numbers of vehicles.

In the Cabinet Sub-Committee meeting of Monday 20th November, 2006 Hon. Sam Kuteesa the Minister of Foreign Affairs informed the members that he had written to some vehicle dealers asking them to express their willingness to sell or lease vehicles to government but that only one company, Motorcare (U) Ltd/Europecar had responded to his invitation. 2 In the Cabinet Sub-committee meeting of 4th December 2006 under Minute 3 the Chairperson of the Sub Committee H.E Prof. Gilbert Bukenya the Vice President of Uganda (now the accused) directed that only one company (Motorcare(U) Ltd which had submitted the bid be considered for leasing of executive vehicles to be used during CHOGM 2007.

The following transport items were approved:

(i) 200 BMW Executive Motor vehicles for use by Heads of State/Governments and WIPs (ii) 80 BMW R1200Rt Police Outrider motorcycles (iii) 60 Subaru 2000 cc Legacy Police Lead Cars (iv) Toyota Land Cruiser Pick Ups for Police Patrols (v) One Toyota Command/Control vehicle

Approval was also given for Direct or Restricted Procurement of Executive Luxury Boats and 20 Ambulances.

In December 2006 a fresh process to procure the executive vehicles directly from Motorcare (U) Ltd/Europcar was initiated on the instructions of the Cabinet Sub Committee. On 18th December 2006, MW&T made a request to PPDA for a waiver for direct procurement but on 21th February 2007, PPDA wrote back rejecting the request and advised use of restricted bidding where at least five providers would be requested to make proposals.

On 2ih February 2007, PP Form 20 was filled and signed by the user department and the Permanent Secretary for restricted bidding for provision of Executive saloon vehicles for VIPs during CHOGM 2007 confirming availability of funds totaling Ugx 8,711,870,000/=.

On 12th March 2007, proposals were invited from the following five firms; Europcar I Motorcare (U) Ltd; Toyota (U) Ltd Spear Motors (U) Ltd; Victoria Motors (U) Ltd; Cooper Motors Corporation (U) Ltd.

3 The bidding period was to be reduced from 22 to 14 working days with a combination of lease/purchase. The closing of receipt of bids and opening was on 3oth March 2007.

On 22nd February 2007, the Cabinet Sub Committee approved Shs.24b/= for the Transport Sub Committee and also approved internal borrowing from Sub Committees with unspent balances to fund urgent requirements.

Only two firms namely; Spear Motors and Motorcare /Europecar submitted their bids.

5. THE EVALUATION PROCESS

Technical compliance selection methodology was used according to Sections 214, 215,216 and 217 of the PPDA Act, which involves three stages of evaluation; Preliminary evaluation, detailed commercial and technical evaluation and financial evaluation. The two firms, Spear Motors and MotorCare/Europcar were evaluated through the 3 stages.

M/s Spear Motors Ltd bid of outright sell was found to be compliant at the preliminary, commercial and technical stages of evaluation.

However, M/s Motorcare (U) Ltd's! Europcar bid found to be non complaint in the following ways:-

• M/s Motorcare(U) Ltd submitted an expired Trading License No. 006676. It expired on 31st December 2006.

• M/s Europcar Ltd submitted a Trading License No. 0079766 issued on 19th January 2007 however the firm had changed its names to M/s Intercar(U) Ltd as per Certificate of Change of Names dated 22nd February 2006.

• Mr. Kenneth M. Kirenga signed the Bid submission Sheet on behalf of M/s Europcar while the Power of Attorney dated 12th July 2006 included in the bid authorized him to act on behalf of M/s Intercar (U) Ltd.

• The MOU of the Joint Venture included M/s Motorcare(U) and Intercar (U) . · Ltd referred to as "Europcar".

4 The Evaluation Committee sought legal opinion from the Solicitor General, as per letter dated 13th April 2007 on the above issues.

The Solicitor General responded to the above issues in a letter dated 19th April 2007 and advised that:-

• The MOU referred to above is valid. • The Trading License No. 0079766 in the names of M/s Europcar is valid. • The Bid Submission sheet is valid.

A Trading License is not a material deviation and that Motorcare (U) Ltd be requested to clarify.

On 19th April 2007, the Evaluation Committee sought further clarification from the Solicitor General holding the view that a trading license was a mandatory requirement and failure to submit it can not be considered as a minor omission/irregularity.

The Solicitor General declined to respond to the above letter, instead a representative of Ministry of Justice and Constitutional Affairs who was attending the meeting on 20th April 2007 informed the Evaluation Committee that the Solicitor General's office had called to re- confirm the earlier legal opinion on the matter that it was unnecessary for the office to offer any further written response on the issue.

On 20th April 2007, the Evaluation Committee wrote to M/s Motorcare (U) Ltd asking them to submit a valid Trading License which Motorcare (U) Ltd did.

Basing on the legal opinion from the Solicitor General referred to above Motorcare/Europcar(U) Ltd was, also passed on to the next stage of financial evaluation.

On 20th April 2007 Spear Motors protested to the Permanent Secretary Ministry of Works and Transport against giving M/s Motorcare (U) Ltd an opportunity to provide new evidence of eligibility 21 days after the closure, public opening of bids and commencement of which actions, according to Spear Motors amounted to flouting the rules of the evaiuation criteria as set out in the bidding document. ·

5 On 23rd April 2007 the Permanent Secretary responded to Spear Motors Ltd's protest and informed them that the Evaluation Committee had based its actions on the advice from the Attorney General.

This prompted M/s Spear Motors to make a further protest on 24h April 2007 to the Executive Director, Public Procurement and Disposal of Public Assets Authority.

On 25th April 2007, the Executive PPDA responded to MOW&T on M/s Spear Motors protest clarifying that failure by a bidder to submit a valid trading license would amount to a material deviation which cannot be corrected by the Evaluation Committee and that such a bidder should not be subjected to further evaluation and advised that the matter should be referred back to the Evaluation Committee for consideration.

The PPDA's recommendation was not implemented and the evaluation process proceeded to the next stage with Motorcare (U) Ltd in the race having provided a valid Trading License as requested.

6. THE FINANCIAL EVAlUATION

The two bids of Motorcare (U) Ltd/Europcar and Spear Motors were financially evaluated under the two options of outright purchase of 204 vehicles or purchase of 30 vehicles and rental of 174 vehicles.

Ms. Spear Motors emerged the best evaluated bidder under the option of outright purchase at a total cost of Euros 8,290,400 (Ug. Shs.19.3bn/= ). Ms Europcar/Motorcare (U) Ltd was the best evaluated bidder under the option of purchase of 30 and rental of 174 vehicles at a cost of Euros 6,936,280 (Ug. Shs. 16.15bn).

6 7. THE CONTRACT AWARD

On 2nd May 2007 the Contracts Committee in its 290th Meeting under Minute 293/05/2007 awarded the contract to Spear Motors Ltd.

On ogth May 2007 Ms Spear Motors was notified of the award in a letter reference ADM/FISS/195/1 signed by Mr. Charles Muganzi, the Permanent Secretary, Ministry of Works and Transport.

On the same date, the Permanent Secretary wrote to Ms. Europecar/Motorcare (U) Ltd as well notifying them that the tender has been awarded to Ms. Spear Motors.

However, in a bizarre turn of events, on 1ih May 2007 the Cabinet Sub Committee meeting under, Minute 5 noted that the available funds and time could not permit the recommendation for outright purchase.

The meeting resolved that the procurement process should be put on hold and the contract awarded cancelled while higher authorities were being consulted giving reason that a cheaper option must be found involving reduced numbers and bring in Station Wagons.

On 28th May 2007, the accused called an emergency CHOGM Cabinet Sub Committee meeting in which he expressed concern over the divergence the procurement process had taken contrary to earlier decisions that had been made by the Cabinet Sub Committee and H.E the President to employ the option of leasing and not outright purchase. The accused observed that the cost for outright purchase of 204 vehicles was Euros 8.28 million but if the option of leasing BMWs was adopted, the cost would be Euros 4.17 million.

The Chairman of the Evaluation Committee informed the meeting that:

"., .... the option of outright purchase was arrived at after a competitive procurement process in accordance with the PPDA Regulations and M/S Spear Motors was the best evaluated bidder. Spear Motor's bid for outright purchase offered the best value for money...... "

After lengthy deliberations, the accused directed among other things that:

7 (i) the Transport Sub Committee goes for the cheapest lease option and drops that of outright purchase due to inadequate funds. (ii) That the Ministry of Transport declares the current position of outright purchase be declared a mis-procurement on grounds of inadequacy of funds and being contrary to the policy decision that preferred leasingR (iii) Ministry of Works and Transport cancels the procurement and commences a new emergency direct procurement to be concluded within a week. (iv) That Ministry of Works and Transport should solicit a bid from Motorcare Uganda Ltd, a representative of BMW as a sole source since it had the cheapest option based on station wagons......

The meeting agreed:

(i) To cancel the procurernent by invoking Article 95 of the PPDA ACT; (ii) To declare an emergency procurement; and (iii) To request for a new quotation from Motorcare by direct procurement.

One day after, on 29th May 2007, the Permanent Secretary/Secretary to the Treasury, Mr. C.M. Kassami wrote to the Permanent Secretary Ministry of Works and Transport informing him that there were insufficient funds to cover the procurement under outright purchase.

On 30th May, 2007, the accused wrote to the Executive Director, CHOGM 2007 Secretariat and authorized that the Committee responsible for transport for CHOGM 2007 go ahead and initiate negotiations with the representatives of BMW in Uganda.

Following the above directive, on 30th May 2007, the Contracts Committee in its 294th Meeting cancelled the procurement on grounds of insufficient funds (PPDA Regulation 95 (1), (2) and (3a) S.

On 4th June 2007 Motorcare (U) Ltd submitted a bid in a joint venture with Intercar(U Ltd. Note that the solicitation document had only been issued to Motorcare{U) ltd not Motorcare/Intercar {U) ltd Joint Venture.

8 On 5th June 2007 the Contracts Committee awarded the Tender to Ms. Motorcare/Europcar/Intercar at a negotiated price of Euros 4,099,360 or 7.8 billion Uganda Shillings i.e. for the provision of 30 Executive BMW vehicles for outright purchase at Euros 1, 428,000, provision of 52 Executive Saloon Cars at Euros 990,080 and 62 Executive Station Wagons at Euros 932,400 for leasing plus Euros 748,800 for Air Freight.

It should be noted that though Motorcare(U) Ltd/Intercar(U) Ltd were awarded the contract their bid was found non-compliant as stated in Contracts Committee decision as follows;

" ..... At its 29rfh meeting held on 5/6/2007, the Contracts Committee observed that the bid should not have been evaluated because of non compliance with the requirement of the solicitation document which include validity period, payment schedule and delivery schedule. However, bearing in mind the time constraint granted a provisional approval.... '.

On 11th June 2007 a Contract Agreement for under Procurement Reference No: MOWT/SERVC/06-07/00349 was signed between the Uganda Government and M/s Motorcare Uganda Ltd/Intercar (U) Ltd for the provision on a rental basis of 144 units of Executive BMW vehicles in the total sum of Delivered Duty Unpaid Euros 4,099,360.

8. OPENING LETTER OF CREDIT:

On 21 June 2007, the Permanent Secretary, MW&T wrote a letter Ref: ADM/F86/352/01 to the Director of External Operations, Bank of Uganda, and advised that the payments to the supplier be made as follows:

LC Number Amount (Euros) Beneficiary Purpose LC 2007/37 932,480 Europcar Rental of 62 Units of BMW Station Wagons LC 2007/38 990,800 Europcar Rental of 52 Units

9 of BMW Executive Saloon LC 2007/39 2,176,800 Motorcare (U) Ltd Purchase of 30 Units of BMW Executive Saloon LC 2007/40 2,232,240 Motorcare (U) Purchase of 80 Ltd units of BMW Motorcycles

9. The prosecution shall further aver and prove that;

9.1. The Public Procurement and Disposal of Public Assets (PPDA) Act Section 28(d) provides that the Contracts Committee shall be responsible for approving Procurement and Disposal Procedures. Furthermore, PPDA Regulation 95(4) provides that a procurement process shall not be cancelled prior to obtaining the approval of a Contracts Committee. Thus the actions of the Cabinet Sub Committee contravened the above provisions.

The Cabinet Sub Committee interfered with the procurement process by halting the bidding process which had been duly initiated under the open international bidding procedures as required under the Fourth Schedule of the PPDA Act.

The accused directed during the Cabinet Sub Committee meeting of 4th December 2006 under Minute 5 that only one company (Motorcare/Europcar(U) Ltd be considered under direct procurement method thereby eliminating competition and transparency , contrary to the PPDA ACT and Regulations.

9.2 The Cabinet Sub Committee in its meeting of 17th May 2007, Minute 5 directed the cancellation of a tender which had been duly awarded to Spear Motors (U) Ltd by the Contracts Committee in accordance with Section 29 (c) of the PPDA Act. These actions were not within the mandate of the Cabinet Sub Committee on CHOGM and were intended to give undue advantage to Motorcare (U) Ltd over her competitor.

10 9.3 The accused was at the centre of a Criminal enterprise to inhibit competition by making every possible effort to ensure that Motorcare/Europcar is awarded the contract through sole/direct sourcing procedures contrary to Section 46 of the PPDA Act which provides that "subject to this Act; all procurement and disposals shall be conducted in a manner to maximize competition and achieve value for money"'This is evidenced by the following:-

• Cancellation of a due procurement process which had been advertised in the public media under Open International Bidding procedures with the intention of allowing only Motorcare/Europcar to bid as a sole bidder against the 23 firms which had bought the bids.

• When Spear Motors Ltd complained, a restricted bidding method was adopted using 5 companies, however before the submission of the bids by the 5 firms the Contracts Committee in its meeting of 21st March 2007 Minute 551/12/06 considered the same subject of procurement of executive vehicles for use during CHOGM and approved direct procurement method for BMW vehicles.

• After the evaluation, Motorcare/Europcar was not the best evaluated bidder because their offer of purchase of 30 vehicles and rental of 174 vehicles of Euros 6,936,280 as compared to Spear Motor's Bid offer of outright purchase at a cost of Euros 8,290,400 was 84% yet the evaluation criteria had set an acceptable lease of 40% to outright purchase.

• The Solicitor General misdirected the evaluation process when he gave a legal opinion that a trading license was not a material omission to warrant disqualification of a non compliant bidder to the next stage of evaluation. Clearly, Motorcare/Europcar bid was not compliant throughout the evaluation process. It was improper for the Solicitor General to advise that a trading license is immaterial by stating that a trading license is easily obtained from Kampala City Council by any trader who pays for it. Indeed, a trading license is a mandatory requirement, simply because there is no - business entity permitted to carry out any

11 business/trade/manufacture in Uganda without a trading license. That is the essence of a trading license according to the Trading License Act. Therefore Europcar/Motorcare's bid should have been rejected at the preliminary stage of evaluation due to lack of a trading license according to section 186 of the PPDA Act.

• The Contracts Committee noted in its minutes that; " ... the bid should not have been evaluated because of non compliance with the requirement of the solicitation document which include validity period, payment schedule and delivery schedule. However, bearing in mind the time constraint granted a provisional aPp rova I..... " The said "time constraint' was caused by improper means of soliciting for bids, indecision by the Cabinet Sub Committee and an apparently predetermined decision to award the tender to Motorcare (U) Ltd.

• The bid offer from Motorcare/Europcar for leasing of 114 at a cost of Euros 1,932,228 for vehicles used for four days (because CHOGM delegates were here for only 4 days), excluding air fright charges clearly did not offer value for money according to section 48 of the PPDA Act. It means that each vehicle was leased at Euros 16,949 or Euros 4,237.342 per day, on top of the air freight charges. '' The offer had earlier been rejected by the Contracts Committee but it was imposed back by the accused in a letter dated 3oth May, 2007. This was contrary to Sections45, 46, 48 and 52 of the PPDA Act.

• Intercar(U) Ltd was never invited to bid under the direct sourcing procedures, but when Motorcare (U) Ltd submitted the bid it was in Joint Venture with Intercar(U) Ltd. This was allowed to pass without question yet Intercar was a stranger to the process.

• If it was true that the reason for cancelling the process was due of lack of funds, due diligence would dictate that negotiations would be held with the responsive and capable bidder. In fact one of the primary measures of capability to perform in a· procurement

12 process is responsiveness of the bidder. It therefore defeats reason that the decision makers' choice for a sole bidder under the reduced scope was Motorcare/Intercar (U) Ltd yet its bid was non responsive throughout the evaluation process.

• The lease option was cheaper because of the cost advantage and expected saving. However in this procurement there was no saving because the lease contract as awarded to Motorcare/Interca r (U) Ltd was more expensive than if the vehicles had been bought.

• The cost of outright purchase for 30 type I vehicles as per contract with Motorcare/Intercar is Euros 1,584,000. Or U shs. 3.63 billion while the cost as was quoted by Spear Motors was Euros 1,404,000 or Ug shs. 3.21bn which means the quotation of Spear Motors was Ug shs. 420million cheaper than that of Motorcare Ltd.

• It is observed that the inclusion of a Logo for the International firm Europcar in the bid submission of Europcar/Motor Care (U) Ltd was deceptive and was meant to hoodwink and mislead the procurement entity into believing that Intercar was the same as Europcar-International merely because its earlier name was changed to Intercar (U) Ltd.

• The deception is also reflected into the Memorandum of Understanding dated 12/7/2006 between Motorcare(U) Ltd and Intercar(U) Ltd, which is referred to as Europcar. The MoU also bears the Logo of Europcar whose headquarters is in France.

10. The prosecution shall seek to tender in and rely on the following documents among others;

a) Newspaper adverts inviting bids for tender for the provision of transport and related services.

b) Cabinet Sub-Committee minutes for meeting held on 11/7/2006 _

c) Cabinet Sub-Committee minutes for meeting held on 14/9/2006

13 d) Cabinet Sub-Committee minutes for meeting held on 4/12/2006

e) Letter dated 21st February, 2007 from PPDA to MWo&T

f) Letter dated 20/4/2007 from Spear Motors (U) Ltd to P/S, MWo&T

g) Letter dated 20/4/2007 from P/S, MWo&T to Spear Motors (U) Ltd

h) Protest letter dated 24/4/2007 from Spear Motors (U) Ltd to PPDA

i) Minutes of MWo&T Contract Committee meeting held on 2/05/2007

j) Letter dated 8/05/2007 from Charles Muganzi, P/S, MWo&T to Spear Motors (U) Ltd

k) Letter dated 8/05/2007 from Charles Muganzi, P/S, MWo&T to Europcar/ Motorcare (U) Ltd

I) Minutes of Cabinet Sub-Committee meeting held on 17/05/2007

m) Minutes of emergency Cabinet Sub-Committee for meeting held on 28/5/2007

n) Letter dated 29/05/2007 from the Secretary to the Treasury, Mr. Chris Kassami to P/S, MWO&T, Mr. Charles Muganzi

o) Letter dated 30/05/2007 from the accused to Executive Director, CHOGM 2007 Secretariat.

p) Minutes of MWo&T Contracts Committee meeting held on 5/06/2007 q) Contract between Government of Uganda and Motorcare for provision on rental basis of 144 units of Executive BMW vehicles in the total sum of Delivered Duty impaid Euro, 4,009,360.

14 L'

WHEREFORE, the prosecution will contend that the accused has no lawful excuse for the offences charged and shall pray that the Honorable court convicts him as indicated . . n~n~. Dated®iW· at Kampala th1s f9l .d1) .. ~~ .. day of .Ml0,\...... , 2011. Sydney Asubo, Director, Legal Affairs, Inspectorate of Government for: INSPECTOR GENERAL OF GOVERNMENT

15 THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA

(ANTI-CORRUPTION DIVISION)

INDICTMENT

(Under S.168 and 169 of the Magistrates Courts Act)

The ...... day of .. ~f..V. 2011, at the sessions holden at Kampala on the .... 7>.'... day of ... @:.c@VWzJ ... 2011, the court is informed by the Inspector General of Government that A1. PROF. DR. GILBERT BUKENYA and A2. MOTORCARE (U) LTD are charged with the following offences:

COUNT I STATEMENT OF OFFENCE

ABUSE OF OFFICE, contrary to section 11 of the Anti Corruption Act, 2009.

PARTICULARS OF OFFENCE

PROF. DR. GILBERT BUKENYA being a person employed as Vice President in the Government of the Republic of Uganda and Chairman of the Commonwealth Heads of Government Meeting (CHOGM) Cabinet Sub-Committee, on various dates between July 2006 and November 2007 within Kampala district did unlawfully and high handedly direct to be done arbitrary acts prejudicial to the interests of the Uganda Government in abuse of his office; to wit; influencing and directing the award of the Contract for Supply of 80 units of BMW R 1200 RT Police Outrider Motorcycles intended for use during Commonwealth Heads of Government Meeting (CHOGM) 2007, to Motorcare (U) L TO in total disregard of the laws, regulations and practices governing Public Procurements in the Republic of Uganda.

1 COUNT II STATEMENT OF OFFENCE

FRAUDULENT PRACTICE, contrary to Section 95(1)(d) of the Public Procurement and Disposal of Public Assets Act, 2003.

PARTICULARS OF OFFENCE

PROF. DR. GILBERT BUKENYA connived and/or colluded with MOTORCARE (U) LTD to commit fraudulent acts; to wit; conniving and/or colluding to award a Contract of supply of 80 Units of BMW R 1200 RT Police Outrider Motorcycles intended for use during CHOGM, 2007 to MOTORCARE (U) LTD.

Sydney Asubo, Director Legal Affairs, Inspectorate of Government Officer Preferring Charges

To: A1. PROF. DR. GILBERT BUKENYA

A2.MOTORCARE(U)LTD

Registrar Anti-Corruption Division Kampala

2 THE REPUBLIC OF UGANDA

IN THE MAGISTRATES COURT AT KOLOLO

(ANTI-CORRUPTION DIVISION}

CRIMINAL CASE NO. HCT-00-ACD-00-CSC-95/2011

UGANDA ------PROSECUTOR

VERSUS

~: :~~~~C~~:-~~~~:UKENYA y======ACCUSED

SUMMARY OF THE CASE

(Under 8.168 of the Magistrates Courts Act)

The Inspector General of Government (hereinafter called the Prosecution) shall adduce evidence at the trial to prove the following facts:

The Ministry of Foreign Affairs was mandated to coordinate all CHOGM preparatory activities and was entrusted with all the funds to finance and implement the CHOGM activities.

Due to the scope and technicalities involved, the Ministry of Foreign Affairs delegated most of the activities to the various committees and Sub-Committees headed by the Permanent Secretaries of various ministries, with all of whom they signed Memoranda of Understanding. ·1 1 2. A Cabinet meeting was held in Kampala on the 16 h of June 2004 to discuss the organizational framework for Uganda's hosting of CHOGM in 2007. Under Minute 206(CT 2004) the Cabinet approved the establishment of a Cabinet Sub Committee to provide political framework needed to oversee the preparation of the Commonwealth Heads of Government meeting, 2007.

2.1 The membership of the Cabinet Sub Committee was: H.E the Vice President as Chairperson and the following Ministers as members; Minister of Foreign Affairs, Finance, Planning and Economic Development, Minister Office of the Presidency, Minister of Health, Minister of Internal Affairs, Minister of Tourism, Trade and Industry, Minister of l!Vorks, Housing and Communications, Minister of Gender, Labour and Social Development, Minister of Water, Lands and Environment, Minister of State, Office of the Presidency (Security).

2.2 The meeting agreed that a Task Force be established with the responsibility to plan for and coordinate CHOGM 2007 and be comprised of the Head of Public Service and Secretary to Cabinet as Head of the Task Force with the following members; Head of Logistics, Head of Security and Accreditation, Head of Accommodation Unit, Head of retreat, Head of Transport, Head of Venue and Communications Unit, Head of Hospitality and Events Unit, Head of Media Centre Unit, Head of Medical Unit.

1 2.3 In a meeting held on 6 h, September, 2004, the Cabinet Sub- Committee began its CHOGM preparations and agreed on a number of issues· including financing of the work of the National Task Force, and approving competent officers to work on the Task Force; among other issues.

2.4 The Cabinet Sub Committee meetings were in most cases chaired by H.E the Vice President Prof. Gilbert Bukenya except when H. E the President attended in person. In the absence of the President and the Vice President, a Cabinet Minister would chair the meetings.

2 3. Under the National Task Force, one of the Sub-Committee was the Transport Sub-Committee delegated to the Ministry of Works and Transport (MWoT). One of their tasks was to make arrangements for transport and related services.

4. TRANSPORT FOR CHOGM 2007

4.1 In the Cabinet Sub Committee meeting held on 15th, February 2005 under Minute 3/2005 the meeting was informed that the Government would be expected to provide appropriate transport for Heads of State, Commonwealth Secretariat staff, delegates and special guests who would include Heads of Regional and International organizations.

4.2 The CHOGM Guidelines required that the host country prepare a detailed operational plan for transport requirements which would primarily take care of the movement of delegations throughout the duration of the conference. Page 42 of the Blue Book paragraph 4 on "transport for Heads of delegation" thus provided that; "The primary focus should be on the movement of Heads of Government from their arrival in the host country to their departure".

4.3 The Blue Book also required that the host country procure a variety of vehicles to include specially armored vehicles for leaders, luxury cars and security escorts among others.

4.4 The Transport Sub Committee under the Ministry of Works and Transport (MW& T) was mandated to procure vehicles for the CHOGM event. The vehicles were to include executive cars, police outrider motorcycles, lead cars, ambulances, command vehicles and patrol vehicles. The Transport Sub Committee hence drew up plans and also made an assessment for the vehicles that would be required to facilitate both the Heads of Government and the delegates. Among other transport facilities it was decided that the Government of Uganda would require 80 Police Outrider Motorcycles.

.· 5. THE PROCUREMENT PROCESS FOR THE 80 BMW POLICE OUTRIDER MOTORCYCYLES

5.1 In their letter to the PS/MW& T, Ref. OPS 175/245/01/31 dated 28/03/2006 "Procurement of Police Out Rider Motorcycles and Lead cars for CHOGM", Uganda Police indicated that they preferred BMW R 1200RT motorcycles and they proposed that selective procurement be used in order to enable them acquire the desired models.

5.2 On 24th May 2006 the Transport Sub-Committee in the MW&T wrote to Uganda Police rejecting the proposed procurement by brand on the grounds that it is not permitted under the PPDA Act and Regulations because it stifles competition. Uganda Police was asked to justify their choice of BMW.

5.3 In his letter to the Chairman of the Transport Sub Committee, Ref. OPS 175/245/01 of 26th May 2006, the Inspector General of Police (IGP) outlined reasons for direct purchase of BMW 1200cc outrider motorcycles for use during CHOGM. He explained that the choice was based on the need to standardize their fleet because at that time the force already had 23 units of BMW motor cycles with competent riders who had also been trained in their maintenance.

5.4 Despite the request by Police, Ministry of Works and Transport decided to advertise for provision of Transport and related services for the CHOGM 2007 in the New Vision of 5th and gth June 2006, the Monitor of 31st May and 5th June 2006 and the East African Newspapers of 5th - 11 June 2006.

5.5 During the 11th Meeting of the Cabinet Sub Committee held on the 11th July 2006, it was decided that the tendering process be halted until the

.. . details of the type of vehicles and the mode of hiring are worked out/determined. Consequently on 14th July 2006, the PS MW&T issued a notice in the newspapers halting the procurement process indefinitely in order to allow consultations with other stakeholders like the Transport Sub Committee and the Cabinet Sub Committee.

5.6 On 1st December 2006, Eng. Okurut, Chief Electrical Engineer, MoW &T wrote to the Secretary Contracts Committee and informed them that M/S Motorcare Uganda Limited, the local representatives of BMW the manufacturer of the motorcycles, had been consulted and they had agreed to submit an official quotation.

5.7 Eng. Okurut further suggested that the Contracts Committee should seek special dispensation from PPDA for direct procurement. In the same letter the Engineer sought for approval of the bid document, shortlist and membership of the Evaluation Team for the procurement of Motorcycles.

5.8 A market survey had been done by Eng Julius Tinkamanyire of Chief Mechanical Engineer's Department to determine the indicative cost of the motorcycles. Subsequently PP Form 20 was filled and endorsed by the Chief Mechanical Engineer, Director of Transport and Permanent Secretary, MW&T indicating that 80 BMW R1200RT motorcycles would cost Shs.4b/=, i.e. Shs.50m/= or Euros 21,645 per unit.

5.9 During the 16th Meeting of the Cabinet Sub Committee held on 4th December 2006, the Chairman, H.E. the Vice President Prof. Gilbert Bukenya (now A 1) directed that "The decision on Transporl that was taken during the 15th Cabinet Sub Committee on CHOGM was final.

.•. All other companies that were coming up with proposals shoufd not be considered".

5.1 0 Following this directive, the Permanent Secretary MW& T on 18111 December 2006, wrote to the Executive Director PPDA requesting for a waiver of open direct tendering to allow direct procurement.

5.11 On 21st February 2007, the Executive Director PPDA Mr. Edgar proposed a list of three known companies dealing in automobiles which included those specifically for BMW, and advised use of Restricted Tendering in order to achieve value for money.

5.12 The companies proposed were namely: Motorcare Uganda Ltd of Uganda, Mashariki Motors Ltd of Kenya and Dayang Motor Corporation of South Africa.

5.13 On ih March 2007, the Contracts Committee of MW& T under Minute. 130/03/07 observed as follows:- i) That PPDA, after meeting officers from MW&T and Police, cleared the Ministry vide their letter PPDA/M20/00 dated 21st February 2007 to use restricted bidding using renowned dealers of fleet brand,

ii) That the MW&T/Police selected three firms out of the list provided by the PPDA that these were the representatives of manufacturers of the preferred BMW R1200RT Police Outrider Motorcycles,

iii) That dully endorsed PP Form 20 was submitted to confirm availability of funds,

iv) That evidence that the three firms are local representatives of the manufacturers and offer after sales services was submitted.

6 5.14 On the ih of March 2007 , the Contracts Committee approved the tender document under the Restricted International Bidding method and short listed the following companies namely; MIS Motorcare (U) Ltd, MIS Mashariki Motors Ltd (Kenya) and MIS South Africa Dayang Motor Corporation.

5.15 Motorcare (U) Ltd was short listed when it did not have a dealership agreement or letter of authorization from BMW. The letter of authorization from BMW Germany to Motorcare (U) Ltd is dated 21 March 2007. This letter was presented long after the short list had been made.

5.16 The Inspectorate of Government wrote to Motorcare (U) Ltd on the 21st of April 2011 and requested them to furnish among other things an original dealership agreement with BMW.

5.17 In a response dated May 3rd, 2011 Mr. Moses Banturaki, the Sales & Marketing Manager of Motorcare (U) Ltd claimed that they got the dealership with BMW in 2006. This explanation is not truthful because there is no fathomable reason as to why Motorcare (U) Ltd had to present a belated Manufacturer's Authorization Form to the procuring entity if the dealership agreement was readily available as it was being claimed.

5.18 A perusal of the documents provided by Motorcare (U) Ltd as a dealership agreement between them and BMW shows that the document is not signed and the dealer contract is between Motorcare (U) Ltd and AES Ltd of the United Kingdom. Thus Motorcare (U) Ltd did not submit an Original Dealership Agreement but merely provided a letter of guarantee of supplies of BMW motorcycles which the evaluation committee construed as compliant with the requirement and recommended Motorcare (U) Ltd for further evaluation.

7 5.18 The assertion by the Contracts Committee that they had got evidence that the three firms were local representatives of manufactures was incorrect because at that time Motorcare Uganda Limited had not got authorization from BMW.

6. ISSUANCE OF SOLICITATION DOCUMENTS

6.1 The solicitation document was issued to the bidders on 12103/2007 using PP Form 31 for 80, 2007, BMW R1200RT Police Outrider Motorcycles of German origin.

6.2 A copy of PP Form 31 obtained from Head of Procurement and Disposal Unit, MW&T indicated that MIS Motorcare Uganda Ltd received the tender document on 15th March 2007, MIS Mashariki Motors signed for the solicitation document on 21st March 2007 and Dayang Corporation On 20th March 2007.

6.3 Only Motorcare (U) Ltd returned and submitted its bid on 301h March 2007.

7. OPENING OF BIDS

7.1 The bids were opened on 3010312007 at 11:00 a.m. in the Ministry of Works Contracts Committee Board Room. The bid opening Form PP 35 shows that only one bidder; M/S Motorcare Uganda Ltd returned the bid which was opened and read out at a cost price of Euro 2,288,240 for 80 motorcycles.

7.2 The investigation team however obtained a letter dated 2910312007 . allegedly submitted by MIS Mashariki Motors Ltd of Kenya withdrawing

8. their bid due to /{unavoidable circumstances". The letter was addressed to the Mechanical Engineer, Old Port Bell Road but it was endorsed with Bid Opening stamp of PDU, MW&T dated 30/03/2007.

7.3 The investigation team interviewed Ms Dorothy Birabwa the then Head, PDU and her former staff on the issue of the withdrawn bid by Masahariki Motors Ltd. They however all denied receiving the Mashariki bid and stated that only one bid from Motorcare Uganda Ltd was received as indicated on PP Form 34.

7.4 Mr. Tabaluka, then Procurement Officer will be called as a witness to confirm that there was even no representative of Mashariki Motors Limited present at the opening of the bids. Further that the letter could have been brought in by trickery to deceive that a bid had been withdrawn in order to leave Motorcare Uganda Ltd a sole bidder.

7.5 During investigations, the Inspectorate of Government wrote a letter dated 25/1/2011 requesting the Kenya Anti Corruption Commission (KACC) to trace Mr. Harrison the General Manager of Mashariki Motors Ltd to explain under what circumstances the company had withdrawn its bid at the last minute yet the company was a well known authorized dealer of BMW Motorcycles.

7.6 The KACC traced Mr. Harrison and Mr. Gecaga, then General Manager and Chairman/Director respectively and recorded their statements as well as establishing the shareholders and directors of Mashariki Motors Ltd. This information was furnished to the Inspectorate of Government. Mr. Harrison alleged that he was only the service manager at Mashariki Motors. He worked with Mashariki up to October 2008 when the BMW

'. dealership was moved from Mashariki to Bavaria Motors. He denied involvement in the tender (to supply BMW Motorcycles for CHOGM 2007)

7. 7 In his statement dated 9/3/2011 Mr. Harrison stated that "sometime in 2007, the Managing Director of Masahriki Motors Mr. Gecaga informed us to prepare the pricing of BMW Motorcycles from Germany. .. . I recall we signed pricing documents which I suppose were sent to BMW Germany and to Uganda. As at this I did not know who was requisitioning for the bikes ... I recall that after the documents were sent to Germany, after a couple of weeks, Germany asked us to withdraw the tender. On instructions of Mr. Gecaga, 1 wrote to withdraw letter to Uganda which went under my signature. Mr. Gecaga never explained why Germany asked us to withdraw the tender''.

7.8 In his statement dated 7/4/2011, Mr. Gecaga denied involvement in the tender to supply BMW Motorcycles and the issue of the withdrawn bid. He however stated that in the year 2005 the shareholders of Mashariki entered into a joint venture agreement to sell the business of BMW dealership to a Danish investment group called Kjaer Group. That this was with BMW approval and was to be for a period of three years. He further stated that: " .... when the inquiry of the procurement of the BMW Motorcycles by the Ugandan Government came it must have come to Maganga who would have to deal with Harrison, being the technical person and finally BMW Group. Personally, I would not be involved in this, 1 never wrote any letters, 1 never dealt with the Ugandan Government or BMW Group over this matter. Also I don't know why the tender never went through (withdrawn) but the instructions for withdrawal must have come from BMW.... "

10 7.9 Investigations confirmed that Mashariki Motors had a formal Dealership Agreement with BMW Germany spelling out terms and conditions of the dealership. On the other hand Motorcare (U) Ltd availed to the Procuring Disposal Unit a plain letter referenced as "Manufacturer's Authorization Letter' from BMW Germany. Mashariki Motors had in 2005 entered into a joint venture agreement with M/S Kjaer Group to sell the BMW dealership agreement. It was further established that it was M/S Kjear Group which guaranteed the order for the police outrider motorcycles with BMW Germany on behalf of Motorcare (U) Ltd, further emphasizing the fact that they (Motorcare) did not have the Dealership Agreement with BMW. 7.10 The investigation team obtained and analyzed the Annual Accounts for Motorcare Uganda Ltd for the Year Ended 31 December 2007. "The Company's Affairs" show that "Motorcare Uganda Limited holds the distribution rights for NISSAN vehicles and SUZUKI motorcycles... " There is no mention of BMW and yet this was the time when Motorcare Uganda Limited had just supplied BMW products to the Government of Uganda.

8. EVALUATION OF BIDS

8.1 Of the three firms invited to bid, only M/s MotorCare Uganda Ltd responded and the bid was subjected to the three stages of evaluation. During preliminary examination Motorcare (U) Ltd submitted a Trading License No. 0066761 which had expired on the 31st December 2006.

8.2 The Evaluation Committee wrote to the Solicitor General requesting for guidance on the issue of the trading license.

11 8.3 In a letter dated 19th, April 2007 the Solicitor General replied stating that the issue of the trading license was non material and that the entity should ask Motorcare (U) Ltd to furnish a proper trading license.

8.4 In a letter dated 20th April 2007 the Evaluation Committee requested Motorcare (U) Ltd to submit a valid trading license.

8.5 The Executive Director of the PPDA Mr. Edgar Agaba objected to the actions of the Evaluation Committee and Solicitor General's opinion. On 25th April, 2007 he wrote to the Permanent Secretary MW& T and stated among other things "that in the present situation unless the facts are shown to be otherwise, failure by a bidder to submit a valid trading license would amount to a material deviation which cannot be corrected by the Evaluation Committee and thus such a bidder should not be subjected to further evaluation". The Evaluation Committee ignored the advice of PPDA and went ahead with the advice of the Solicitor General.

9. FINANCIAL COMPARISON TO RANK THE BIDS

9.1 Investigations established that since there was only one bid, there was no financial comparison done. The Evaluation Committee noted that the bidder had quoted a unit price of DDU Euros 28,603 (Delivery Duty Unpaid) which was far higher than ODU Euros 21,645 estimated in PP Form 20.

9.2 The Evaluation Committee recommended that the tender for supply of 80 BMW R 1200 RT motorcycles be awarded to M/s Motorcare Uganda Ltd and that a waiver be sought from PPDA to have negotiations with the bidder to have the unit price reduced from the offered Euros 28,603 which

12 was inconsistent with the estimate of DDU Euros 21,645 as indicated in PP Form 20.

10. CONTRACTS COMMITTEE DECISION

10.1 During the 289th meeting held on 26th April 2007, the Contracts Committee awarded the tender for procurement of 80 Police Outrider Motorcycles BMW R1200RT for use during CHOGM, 2007 M/s to MotorCare Uganda Ltd and granted permission for negotiations for a possible reduction of the unit price from Euros 28,606 to Euros 21,645 in accordance with Reg. 219 (4) and Reg. 166 (4) of the PPDA Regulations, 2003.

10.2 Records indicate that negotiations took place on the gth and 9th of May 2007 under the Chairmanship of Amb. Mugoya but the PPDA waiver for negotiations on the price was granted on 21st May 2007.

10.3 During the negotiations, M/s Motorcare Uganda Ltd was only willing to reduce the unit price by Euros 700, thus reducing the price from Euros 28,603 to Euros 27,903, giving a quoted total sum of Euros 2,232,240 (Euros two million, two hundred thirty two thousand two hundred forty), which was still higher than the estimated cost as per PP Form 20.

11. CONTRACT AGREEMENT

11.1 On 12/06/2007, the Government of Uganda represented by MW&T signed a contract agreement with M/s Motorcare Uganda Ltd for supply of 80 BMW R 1200 RT Police Outrider Motorcycles at a sum of Euros 2,232,240.

12. SPECIAL PROVISIONS UNDER THE CONTRACT AGREEMENT

13 1:

12.~

13.1 ~'i &5£

13.2

12.1 The contract agreement between the Government of Uganda and Motocare (U) Ltd provided for various inspections to be carried out. Under Article 26 of the contract. Article 26.2 provided that " ... at/ reasonable facilities and assistance, including access to drawings and production data, shall be furnished to the inspectors at no charge to the Procuring and Disposing Entity."

12.2 Clause 26.3 provides that; "the Procuring and Disposing Entity or its designated representative shall be entitled to attend the tests and/or inspections, provided that the PDE bears all its own costs and expenses incurred in connection with such attendance ...... ".

12.3 Clause 26.4 provides that; "Whenever the provider is ready to carry out such tests and inspections, it shall give a reasonable advance notice, including the place and time, to the Procuring and Disposing Entity...... "

13. THE INSPECTION TRIP TO GERMANY

13.1 In fulfillment of the conditions of the contract mentioned above, an inspection visit was organized between 1ih September 2007 and 21st September 2007 to Germany; arranged by Motorcare (U) Ltd in conjunction with BMW Division for Sales in Africa and Caribbean Region. The purpose was to inspect and verify the production of the 144 BMW vehicles and 80 BMW 1200RT Outrider motorcycles for CHOGM 2007 in accordance with the agreement.

13.2 The inspection team was comprised of Eng. George William Okurut, the Chief Mechanical Engineer MOWT, Mr. Albert Akovuku, Chief Transport

. -~ . -~ Officer, State House and Mr. John Ndugutse, Assistant Superintendent of Police, UPF.

13.3 The inspection team did not inspect any of the Motorcycles or vehicles that they had gone to see.

13.4 The inspection report made by Eng. Okurut the Chief Mechanical Engineer (who led the Government Team) dated 5th October 2007 indicates that the team did not inspect the motor vehicles and motorcycles under production reportedly because production had been completed and the units were enroute to Uganda via Vatry Airport in France but the team was not availed any documentary evidence to back this claim. Further that they were not availed the production data and transportation details (port and date of embarkation, mode and dates of departure and destination) as per conditions of the contract.

13.5 The investigations established that Mr. Moses Banturaki, the Sales Manager of Motorcare (U) Ltd was responsible for arranging the trip to Germany. The team traveled with an understanding that they would be able to inspect the motorcycles and vehicles according to the scheduled plan. The government officials reported that they were merely taken around the company show rooms and shown vehicles and motorcycles which BMW officials claimed were similar to the ones Government of Uganda bought.

13.6 There was a breach of the terms of Article 26 of the Contract Agreement by Motorcare Uganda Ltd who arranged the trip well aware that the vehicles and motorcycles had already been dispatched to Uganda. The expense of Shs.14,607,000= which government incurred on the aborted

15 trip was a loss that was occasioned by the deliberate actions of Motorcare (U) Ltd.

14. OPENING LETTER OF CREDIT

14.1 On 13/06/2007, the Permanent Secretary lv1W& T applied to Bank of Uganda for an irrevocable letter of credit in favour of M/s Motorcare Uganda Ltd for supply of 80 R 1200RT BMW Police Outrider motorcycles at Euros 2,232,240.

14.2 On 19/06/2007, Bank of Uganda opened an Irrevocable Letter of Credit No. LC 2007/40 with DEUTSCHE BANK AG, FRANKFURT Af\11 MAIN for Euros 2,232,240 as the intermediary bank through which payments would be effected to the supplier. The supplier's bani<: was then indicated as STANBIC BANK UGANDA 17 HANNIHNGTON ROAD, CRESTED TOWERS but this was later changed to NORDEA BANK, COPENHAGEN, DENMARK.

14.3 Information obtained from the department of Settlements and Payments, Bank of Uganda indicated that at the time of issue of the Letter of Credit on 19/06/2007, the Exchange Rate was UGX 2,213.61/= for one Euro and that a total of Shs. 4,941,308, 786/= was paid to the supplier plus commission of 1% of Shs.49,413,088/= to the clearing bank, giving a total of Shs.4,990, 721 ,874/=.

15. DELIVERY OF THE MOTOR CYCLES

15.1 Information obtained from Uganda Revenue Authority (URA) Customs at Entebbe Airport indicated that the 80 motorcycles were delivered in eight

. batches. Customs Officers, who cleared motorcycles on arrival for assessment of taxes, indicated the following anomalies:

1. The motorcycles were delivered fully assembled and ready to ride. The contract stated that they were to be assembled in Uganda. 1\11/s Motorcare (U) Ltd claimed that there was little time to import the bikes in parts for assembly in Uganda due to time constraints.

ii. They were brought with airway bills only and without invoices.

iii. They did not have any label as to the country of origin and year of manufacture except that the issuing carrier's agent was based in Denmark.

iv. That invoices bearing Motorcare (U) Ltd were brought later after the motorcycles had been handed over to police.

According to customs officials interviewed, this is not the normal way the imports transaction should be presented for clearance. Each batch is supposed to have three airway bills, invoices from the manufacturer, packing list, labels as to country of origin, and year of manufacture.

16. M/S MOTORCARE (U) L TO

16.1 Investigations have established that originally Motorcare (U) Ltd was registered as M/S NISSAN UGANDA LTD and incorporated on 22nd June 1994 with shareholders as Kjaer & Kjaer ( a Danish Company) (80 Shares) and Emmanuel Katto ( a Ugandan Businessman) (20 Shares).

17 16.2 On 15th December 1995, the name was changed from MIS NISSAN Uganda LIMITED to M/S NIS (U) LIMITED and on 1i11 February 2001, the name changed to MOTORCARE UGANDA LIMITED with M/S Kjaer Group as the sole shareholder. The directors were Pier Lindgren and Flemming Eltang both Danish and Christos Kyriakidis a Greek.

16.3 The Investigation team obtained documents/information from Motorcare (U) Ltd among which were invoices originated by KJAER GROUP of GRONNEMOSEVEJ 6 P. 0. BOX 260 DK-5700 SVENDBORG, DENMARK to M/S Motorcare Uganda Ltd of P. 0. Box 12704, Plot 95, Jinja Road, Kampala.

16.4 On the 13th of October 2010 the Inspectorate of Government wrote to the General Manager of Motorcare (U) Ltd Mr. Lars Bjerre and requested him to provide the production data and documents related to the supply of the 80 Motorcycles including a Purchase Order form placed by Motorcare (U) Ltd to the manufacturer, Telegraphic transfer payment documents and acknowledgment receipts from the manufacturer. On the 18th October 2010, Mr. Bjerre replied and provided an incomplete list of documents that excluded those required by the Inspectorate of Government. Instead of the providing the said documents above Mr. Bjerre provided the following: • Declaration forms duly signed and stamped by SDV Transami • EN HAS Cargo Release Orders for 80 motorcycles • Airway bills for 80 motorcycles • Kjaer Group Invoices for 80 motorcycles • SDV delivery notes to MotorCare Uganda for 80 motorcycles • Bill of Entry forms for 80 motorcycles

18 16.5 On 26/10/2010 the investigation team issued a notice requiring Mr. Bjerre to corn ply with the earlier request pursuant to Section 41 (1) (e) of the Anti Corruption Act 2009. However to date MotorCare has not complied but instead Mr. Lars Bjerre immediately left Uganda.

16.6 On 30th October 2010, Mr. Banturaki who signed for the General Manger Mr. Lars Bjerre replied to the Inspector General of Government and stated that Motorcare was "NOT IN POSSESSION" of the Production Data, Purchase Order Form placed to the Manufacturer BMW, Proforma Invoice from th.e Manufacturer BMW and the Telegraphic Transfer (TT) payments. He stated that the required documents are in possession of Kjaer Group Denmark and BMW Motorad Germany who in turn claim that these are allegedly "trade secrets".

16.7 It must be noted that the documents specified above are crucial in establishing value for money and verifying the origin, type and costs of the Motorcycles that the Uganda Government had procured.

16.8 According to prices indicated on the invoices, Kjaer Group charged Motorcare Uganda Ltd Euros 21,160 per motorcycle. The invoices also included a fixed charge for Air freight and Transport Insurance of Euros 1,231 for each of the eight batches thus totaling to Euros 9,848 for transportation and insurance.

16.9 M/S Motorcare Uganda Ltd in turn prepared its own invoices to Ministry of Works and Transport and charged each motorcycle Euros 27,903. This transaction indicates that M/S Motorcare (U) Ltd made a difference of Euros 6, 7 43 per motorcycle leading to a total Euros 539,440 for the whole supply of 80 motorcycles.

19 .1> tj

16.10 It was further established that M/S Motorcare (U) Ltd acted as middle men between Uganda Government and Kjaer Group for which they reaped Euros 539,440. The contract to supply motorcycles did not provide for such middlemen and Motorcare (U) Ltd never disclosed this fact to government. The overcharge was therefore a loss by Uganda Government.

17.\'VHETHER THE 80 BMW R1200RT POLICE OUTRIDER MOTORCYCLES WERE PROCURED WITHOUT DUE REGARD TO THE PUBLIC PROCUREMENT PROCEDURES AND REGULATIONS.

17.1 A cardinal principle under the procurement laws in Uganda is that all procurements are carried out to maximize competition and achieve value for money. Section 46 of the PPDA Act provides thus; "Subject to this · Act, all procurements shall be conducted in a manner to maximize competition and achieve value for money" .

17.2 The Cabinet Sub Committee under the Chairmanship of H.E the Vice President Prof. Gilbert Bukenya mishandled the procurement of transport services. As a result of this, the procurement process for the BMW Outrider motorcycles was marred with instances of contravention of the Public Procurement Laws.

17.3 The Chairman of the Cabinet Sub-Committee on CHOGM H.E The Vice President, Prof. Gilbert Bukenya directed that the decision to procure from Motorcare (U) Ltd was final and that no other bidder should be allowed to submit a proposal.

17.4 Prof Gilbert Bukenya assumed the role of the Contracts Committee of the Ministry of Works when he confirmed that the award of the tender to

20 . Motorcare (U) Ltd would be final. By so doing, he stifled competition and transparency in the said procurement.

17.5 The PPDA Act provides guidance on the definition of a procuring and disposing unit. Section 3 of the PPDA Act provides that a procurement and disposal unit is "a division in each procuring and disposing entity responsible for the execution of the procuring and disposal function"

17.6 The duty to execute and manage the procurement process was therefore a preserve of the PDU, of Ministry of Works and Transport and not the Cabinet Sub Committee on CHOGM. The actions of A 1 not only contravened the PPDA Act but also led the Government of Uganda to deal with a company which at the time did not have any dealership agreement with BMW Germany.

17.7 At the time Motorcare (U) Ltd was shortlisted, they did not have a dealership agreement with BMW. The fact that it was included as a BMW dealer on the short list raises fundamental questions about the transparency of this procurement. The dealer contract that Motorcare furnished the Inspectorate is not an authentic document as it was not signed by any party. Secondly the dealer contract is between Motorcare and AES Ltd not BMW the manufacturer.

17.8 Further more, Motorcare (U) Ltd failed to present a valid trading license. They should have therefore been eliminated at the preliminary evaluation stage.

17.9 However, the Evaluation Committee erroneously chose to seek the guidance of the Solicitor General on this matter instead of the PPDA

21 ,.'l { f ' -~·

Authority which is the body mandated to guide Government on all public procurement and disposal matters.

17.10 For avoidance of doubt Section 7(a) of the PPDA Act 2003 provides as follows; ''The functions of the Authority are to advise Central Government, Local Government and statutory bodies on afl public procurement and disposal policies, principles and practices"

18. The prosecution shall seek to tender in and rely on the following documents among others;

a) Blue book

b) Letter dated 28/3/2006 from Uganda Police to PIS, MWo&T Ref. OPS 175/245/01/31

c) Letter dated 26/5/2007 from the Inspector General of Police to Chairman, Transport Sub-Committee Ref. OPS 175/245/01

d) Minutes of Cabinet Sub-Committee meeting held on 11/07/2006

e) Minutes of Cabinet Sub-Committee meeting held on 4/12/2006

f) Proposal for restricted tendering by Executive Director of PPDA dated 21/02/2007

g) Minutes of MWo&T Contract Committee meeting held on 7/03/2007

h) Letter dated 21/04/2011 from the Inspector General of Government to Motorcare (U) Ltd requesting original dealership agreements with BMW

i) Letter dated 3/05/2011 from Mr. Moses Bantwaki, Sales & Marketing Manager Motorcare (U) Ltd to Inspector General of Government

j) Letter dated 25/01/2011 from the Inspector General of Government Uganda to Kenya Anti-Corruption Commission (KACC)

22 k) Letter dated 19/04/2007 from the Solicitor General to Evaluation Committee MoW&T.

I) Letter dated 20/04/2007 from Evaluation Committee to Motorcare (U) Ltd

m) Letter dated 25/04/2007 from Executive Director of PPDA Mr. Edgar Agaba to P/S, MoW&T, Mr. Charles Muganzi

n) Contract between Government of Uganda (represented by Mo\N&T) and Motorcare (U) Ltd for supply of 80 BMW R 1200RT Police Outrider motorcycles

o) Report of Inspection Team to Germany dated 5/10/2007

WHEREFORE, the prosecution will contend that the accused have no lawful excuse for the offences charged and shall pr(\hat the Honorable court convicts both of them as indicted. ~ 1 Dated at Kampala this .. b...... day of . . . . )

Sydney Asubo, Director, Legal Affairs, Inspectorate of Government For: INSPECTOR GENERAL OF GOVERNMENT

-' ''

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA

(ANTI-CORRUPTION DIVISION)

!NDfCTMENT

\ (Under S.168 and 169 of the Magistrates Courts Act) 1rJ lfc)\~~ The ... )" ...... day of ...... 2011, at the sessions holden at Kampala on the .... ~ ... day of ...... ~~9 .. 2011, the court is informed by the Inspector General of Government that PROF. DR. GILBERT BUKENYA is charged with the following offence:

COUNT STATEMENT OF OFFENCE

ABUSE OF OFFICE, contrary to section 11 of the Anti Corruption Act, 2009.

PARTICULARS OF OFFENCE

PROF. DR. GILBERT BUKENYA being a person employed as Vice President in the Government of the Republic of Uganda and Chairman of the Commonwealth Heads of Government Meeting (CHOGM) Cabinet Sub-Committee, on various dates between December 2006 and November 2007 within Kampala district did unlawfully and high handedly direct to be done arbitrary acts prejudicial to the interests of the Uganda Government, in abuse of his office; to wit; influencing and directing the award of the Contract for Supply of Executive Vehicles intended for use during Commonwealth Heads of Government Meeting (CHOGM) 2007, to Motorcare (U) L TO in total disregard of the laws, regulations and practices governing Public Procurements in the Republic of Uganda.

1 i\ -~ r

Sydney Asubo, Director Legal Affairs, Inspectorate of Government Officer Preferring Charges

To: PROF. DR. GILBERT BUKENYA

Registrar Anti-Corruption Division Kampala