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MPs Mawanda and Mudimi allegedly used cooperative money to pay off debts

MPs Mawanda and Mudimi allegedly used cooperative money to pay off debts

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KAMPALA- The Public Prosecution Service (ODPP) has filed a complaint in court alleging that lawmakers Michael Muranga Mawanda and Ignatius Wamakuyu Mudimi jointly used money to settle their debts arising from legal cases.

The prosecution’s evidence is contained in a chargesheet filed on Friday (July 19, 2024) by ODPP Chief Prosecutor Edward Muhumuza and Chief Public Prosecutor Raymond Mugisa at the Nakasero-based Anti-Corruption Court in Kampala.

According to the charge sheet, Mawanda initially received Sh1b in 2021 which he allegedly used to pay Buyaka G.CS Limited Creditors and another Sh200m to settle his debt arising out of a suit No. 28 of 2020 in the Commercial Division of the High Court.

The case was filed by Eng. George Turyakira against Mawanda. The money was allegedly paid to Turyakira on October 7, 2021 and November 24, 2021 respectively.
The indictment also reveals that Sh33 million was used to pay off a loan for Mawanda and Mudimi.

Mudimi is also accused of using Sh865.9 million of cooperative funds to repay his outstanding loan to Jain Rajnish.

Court documents show that attorney Kirya settled the debts on Mawanda’s behalf.

In addition to the debt payment, Sh85 million was reportedly transferred to Mudimi’s account at the dfcu Bank branch on Jinja Road.

Members of Parliament Mawanda (Igara East) and Mudimi (Elgon County) together with Paul Akamba (Busiki County), the Permanent Secretary of the Ministry of Trade, Geraldine Busuulwa Ssali, Leonard Kavundira (the Chief Cooperative Officer of the Ministry of Trade) and Lawyer Julius Kirya are fighting corruption allegations relating to the sh3.8b Cooperative Financing Scheme.

The suspects were transferred to the Anti-Corruption Division of the Supreme Court for trial.

The Public Prosecution Service says they will provide evidence to show that Kirya’s provision of money to Mawanda and Mudimi amounted to money laundering.

The Prosecution further alleges that on June 14, 2023, Sh200 million was transferred to Akamba’s bank account at DFCU.

Members of Parliament Mawanda (Igara East) and Mudimi (Elgon County) are fighting corruption allegations relating to the sh3.8b cooperative financing scheme alongside Paul Akamba (Busiki County), Permanent Secretary at the Ministry of Trade Geraldine Busuulwa Ssali, Leonard Kavundira (Principal Cooperative Officer at the Ministry of Trade) and Lawyer Julius Kirya. (New Vision/Files)

Members of Parliament Mawanda (Igara East) and Mudimi (Elgon County) are fighting corruption allegations relating to the sh3.8b cooperative financing scheme alongside Paul Akamba (Busiki County), Permanent Secretary at the Ministry of Trade Geraldine Busuulwa Ssali, Leonard Kavundira (Principal Cooperative Officer at the Ministry of Trade) and Lawyer Julius Kirya. (New Vision/Files)

According to the indictment, Kavundira is alleged to have influenced and coerced the chairman of the Buyaka Growers Cooperative Society to abandon their duly appointed lawyers, Anguria and Company Advocates and Mungoma and Wakhakha and Company Advocates, in favour of Kirya and Company Advocates, in order to investigate their claim of war losses before the Ministry of Commerce.

The Public Prosecution Service states that Kavundira, as a member of the Verification Committee (a parallel committee set up by Ssali), was already aware of the claim and what was owed to Buyaka Growers Cooperative Society.

Ssali is accused of approving payments to Kirya and Company Advocates in breach of the Treasury Instructions 2017.

The Public Prosecution Service also alleges that Ssali set up a parallel verification committee, contrary to the inter-ministerial committee set up by the Cabinet to accelerate the disputed verifications of various cooperatives for her personal interests.

Ssali is also accused of irregularly making payments to Buyaka Growers Cooperative Society without supporting documents.

Ssali is fighting charges of abuse of power, causing financial loss under Sections 11 and 19 of the Anti-Corruption Act respectively, and conspiracy to commit fraud under Section 309 of the Criminal Code Act. (New Vision/Files)

Ssali is fighting charges of abuse of power, causing financial loss under Sections 11 and 19 of the Anti-Corruption Act respectively, and conspiracy to commit fraud under Section 309 of the Criminal Code Act. (New Vision/Files)


Cost

Ssali is charged with abuse of power and causing financial loss under Articles 11 and 19 of the Anti-Corruption Act respectively, and with conspiracy to commit fraud under Article 309 of the Criminal Code.

These charges carry significant penalties if convicted: causing financial loss can lead to up to 14 years in prison, abuse of power to up to seven years, and conspiracy to commit fraud to up to three years.

The three lawmakers are accused of embezzlement of public funds and receiving stolen goods, while lawyer Kirya is fighting charges of embezzlement of public funds, theft by agents and money laundering. On the other hand, Kavundira is also accused of abuse of power.

Accusations

The Public Prosecution Service alleges that Ssali, during the financial year 2021/2022, abused her powers and irregularly introduced Buyaka Growers Cooperative Society Limited to the cooperatives that were to be compensated by the government for the war losses. This cooperative was not listed on the request for the supplementary budget of 4 August 2021.

According to the Public Prosecution Service, the arbitrary act is harmful to her employer (Ministry of Trade).

It is further alleged that during the 2021/2022 and 2022/2023 financial years, Ssali made payments to Kirya and Company Advocates amounting to Sh3.8 billion, intended for Buyaka Growers Cooperative Society, contrary to the 2017 instructions of the Ministry of Finance.

According to the Public Prosecution Service, she did this knowing or with reason to believe that such an act would lead to financial loss for the government.

It is alleged that Ssali, together with the five accused and others who are still at large, conspired between 2019 and 2023 to defraud the government of Sh3.4 billion as compensation for war losses suffered by the Buyaka Growers Cooperative Society.

Background

Court documents show that during the 1981-1986 war of independence and the insurgency that swept parts of the country, a number of partnerships and assets were negatively affected.

Based on this, several cooperatives, including Buyaka Growers Cooperative Society, submitted their claims for compensation to the government.

On May 8, 2020, Buyaka Growers Cooperative Society filed a claim of Sh17.3 billion with the Ministry of Commerce.

The three lawmakers are accused of embezzling public funds and receiving stolen goods, while lawyer Kirya is fighting charges of embezzling public funds, theft by agents and money laundering. On the other hand, Kavundira is also accused of abuse of power. (New Vision/Files)

The three lawmakers are accused of embezzling public funds and receiving stolen goods, while lawyer Kirya is fighting charges of embezzling public funds, theft by agents and money laundering. On the other hand, Kavundira is also accused of abuse of power. (New Vision/Files)

Subsequently, the government, through a cabinet memorandum, established an inter-ministerial verification committee charged with verifying the claims of various cooperatives regarding war losses.

Based on this, the Verification Commission conducted an assessment of the Buyaka Growers Cooperative Society and found that the cooperative’s loss amounted to Sh5.4 billion.

On August 4, 2021, the Permanent Secretary, Ministry of Commerce, wrote to the Secretary to the Treasurer, Ministry of Finance, requesting a supplementary budget of Sh54.5 billion. This included Sh10 billion for compensation of war losses for cooperatives in Masaka (Sh2.4 billion); Teso (Sh1 billion); Nyakatonzi (Sh1.1 billion); Bukedi North (Sh1.2 billion); Bunyoro (Sh1.5 billion); Lango (Sh723.6 million); Kigezi (Sh1 billion) and Central West Nile (Sh1.2 billion).

According to the Public Prosecution Service, Buyaka Growers Cooperative Society was not among the cooperative societies named in the application, but was nevertheless earmarked for a distribution of Sh1.5 billion.

Subsequently, on October 21, 2021, the Minister of Finance wrote to the Speaker of Parliament to submit a supplementary expenditure schedule for the 2021/2022 budget year, which included the payment of sh8b to the Ministry of Commerce for compensation of war losses of cooperatives.

But the Parliamentary Budget Committee has proposed and recommended an allocation of Sh17.5 billion to the Ministry of Commerce as compensation for various cooperatives without any basis or justification, the prosecution said.

However, the Public Prosecution Service claims that the cooperatives that would benefit from the approved sh17.5b do not include the Buyaka Growers Cooperative Society.

Parliamentary finding

On August 25 last year, the Sectoral Committee on Tourism, Trade and Industry was mandated by the Speaker of Parliament, Anita Among, to conduct an investigation into the status, governance, resources and value for money of public funds allocated to cooperatives in the financial years 2011/2012-2022/2023.

The committee, headed by Mwine Mpaka (Mbarara City South), submitted its report to parliament in October last year, accusing several legislators, lawyers and boards of cooperative societies of mismanaging the funds.

The Chairman has submitted the report to the relevant government agencies, including the Directorate of Criminal Investigations, the Office of the DPP and the Inspector General of Government, for investigation.

Buyaka Co-operative Society was registered in 1949. The cooperative first signed a Memorandum of Understanding between the Society and M/SE Angura and Company Advocates on March 6, 2020. The law firm would receive a fee of 5% of the value of the government compensation money for legal representation and consultancy work.

However, the Commission found that this communication was never received by the Minister of Trade.

The committee expressed concern and wondered why the co-operative society had appointed another law firm, M/S Mungoma, Mabonga, Wakhaka and Company Advocates, to perform the same task.

The chairman of the cooperative society informed the committee that an official from the Ministry of Commerce (Kavundira) had advised them to engage another lawyer.

Kavundira is said to have introduced Kirya and Company Advocates, who he said would be in a position to defend their claim before the ministry.