24 , Thursday, November 6, 2014 BUSINESS & TENDERS Sembatya says he would rather another company buys out the sh16.7b NSSF loan and convert it into equity SHAREHOLDER BLOCKS NSSF

The news TAKEOVER OF CLAYS The takeover of Uganda Clays Limited of NSSF by the National Social Security Fund (NSSF) has hit a snag after one of taking over management the shareholders petitioned the High Court to stop the process. Habib Sembatya went to the High of Uganda Clays has been Court contesting the conversion of the sh16.7b debt that Uganda Clays owes greeted with mixed reac- NSSF into shares. The High Court has since issued a temporary order pending hearing of the Sembatya’s tions. As Samuel Sanya and main application challenging the conversion. Chris Kiwawulo write, one The restraining order was issued by the High Court’s deputy registrar, Charles Emuria. The main application is set to be heard on Monday, November 10.

Uganda Clays shareholding Sembatya, a minority shareholder with 215,000 shares and a former employee of Uganda Clays for 17 years, objected to a proposed 28% dilution of the stake of minority shareholders, in the civil suit. Sembatya was a quality assurance controller until 2006 when he was reassigned as marketing executive - technical. Before the announcement of the conversion, NSSF was the majority shareholder in Uganda Clays with 32.5% or 292,640,000 shares. The conversion raises NSSF’s shareholding Above: Samples of Uganda Clays products. On the right is the court order to 66%. NSSF is followed by the National Insurance Corporation (NIC) at total of 2,688 individuals also hold 34.7% syndicated loan from Standard by Uganda Clays to test the 18% shareholding. Other notable shares in Uganda Clays. Chartered Bank and the East I am suing clay, advised that the shareholders include Roofings Limited, African Development Bank to clay be avoided. Kenya Power and Lighting Company Origins of the loan finance the Kamonkoli factory. them with costs Sembatya states that he and the Uganda Development Bank. Uganda Clays got an unsecured loan of It also had a separate finance formally queried the escalation Others shareholders are saving sh11.05b from NSSF to pay off a heavy lease with Stanbic Bank. of the investment cost for the schemes of employees at the Central loan, procure spares for the because they Kamonkoli factory from sh24b Bank of Kenya, , Kenya factory and enhance the Kamonkoli factory Sembatya’s contention to sh35b, which irked his Airways, Uganda Communications in Eastern Uganda. Sembatya says he would rather defrauded us bosses. employees, NSSF, Uganda Revenue By the time of the conversion, the loan another company buys out the Authority (URA), Stanbic Bank and stood at sh16.7b with interest. sh16.7b NSSF loan and convert by telling us Audit commissioned the East African Development Bank. A Prior to that, Uganda Clays had taken a it into equity. Documents revealed that “NSSF has been around as the Kamonkoli former Uganda Clays managing the majority shareholder as all director Charles Rubaijaniza, this happened,” and refused who took over the fledgling to investigate whistleblower factory would be company, commissioned audit information on what was firm, Deloitte, to investigate happening in Uganda Clays, profitable but it is allegations of fraud in the he says. company three months before “If NSSF increases its stake, not Sembatya his exit. DIRECTORATE OF REVENUE COLLECTION it means I am going to lose as The scope of the investigation a minority shareholder. I am included instances of PUBLIC NOTICE suing them with costs because told him what was happening. nepotism, unfair treatment to all current and prospective business Proprietors/Traders they defrauded us by telling us He adds that after he talked of employees, irregularities the Kamonkoli factory would to Byarugaba, he was surprised in the administration of the be profitable but it is not,” he NSSF did not insist on a staff provident fund, irregular Pursuant to Section 8 (1) of the Trading License All 2015 Trading Licenses Must be Acquired stated. forensic audit which would procurements and irregularities Act Cap 101, which states that no person shall to avoid any likely by 1st January 2015 He contends that the mess have paved way for correctional in the running of certain trade in any good or carry-out any business unless inconvenience that might be occasioned. in Uganda Clays happened measures at Uganda Clays. company projects and agents. he/she is in possession of a Trading License because of the disregard to This, he contends, means It is unclear whether the granted to him/her for the purpose under the Act, Trading licenses will only be issued to businesses reports of poor quality clay NSSF cannot be trusted with a forensic investigation was KCCA herewith reminds all businesses in Kampala which will have complied with all legal at Kamonkoli and fraudulent larger stake in the company. undertaken. that all licenses issued for the calendar year 2014 requirements including Public Health misrepresentation to existing He says that advisory However, details of a letter will expire on the 31st December 2014. and Physical Planning Acts. shareholders, as well as information from an Italian dated February 19, 2013, from potential investors on the heavy clay company, Morando, Deloitte director Fred Okwi This, therefore, serves to inform/remind all Management Kamonkoli clay. revealed that two clay samples indicated that phase 1 and 2 esteemed clients who are doing or intending to Sembatya alleges that his “gray” and “black” that were of the investigation were to run businesses in Kampala to approach our KCCA sacking in January 2013, taken from the Kamonkoli site take approximately 20 and Division offi ces to be facilitated with the process of P.O.Box 7010 Kampala-Uganda followed his revelation of came back with a damning 12 working days respectively, acquiring of Trade Licenses. Plot 1-3 Apollo Kaggwa Road the mess in Uganda Clays’ verdict for the “black” clay, including reporting and Tel: 0414-231446 / 0204 660000 management. He says he had which was ignored. presentation of respective Web: www.kcca.go.ug E-mail: [email protected] met with then NSSF managing In a June 20, 2007, letter, reports. f: facebook.com/kccaug T:@KCCAUG director Richard Byarugaba and Morando who had been asked Suit documents also revealed