By Our Reporters
This news website has become privy to much of the proceedings and the very polarizing debate that preceded the final cabinet decision on UTL which has since been sold to Taleology Holdings Ltd at Shs268bn (or $71m) giving the Nigerians 67% shareholding in the company. The other contender that came very close to taking UTL was Mauritius Telecom which lost out largely because its $45m (or Shs167bn) offer was way below Nigerians’ Shs268bn. As Deputy Premier Moses Ali (who chaired a committee that had the last word on the deal) confessed to President Museveni in one of the cabinet meetings, each of these two companies had cabinet ministers supporting it. Whereas the process to get UTL investor had been on for close to 2 years, our story will particularly focus on two cabinet meetings of 17th and 24th September. Gratefully they were both chaired Museveni who was clearly disgusted the UTL discussion had dragged on for too long.
HEATED DISCUSSIONS;
In the 17th September meeting, AG William Byaruhanga presented a report of his cabinet subcommittee findings reducing the initially very long list to just two companies. With some Ministers raising impartiality concerns and questioning the wisdom in wasting time instead of choosing the company (Taleology) that had clearly made a larger offer, Byaruhanga’s report was dismissed as not good or decisive enough. Museveni decided to send the matter now to another committee headed by Premier Ruhakana Rugunda. Other members were Frank Tumwebaze, David Bahati, Moses Ali, Byaruhanga and Rugunda the chair. Task was for Rugunda to study all the relevant documentation, do due diligence and return to cabinet within one week guiding on one best company of the two. He had strictly one week. But on 24th September, Rugunda was away in NY for UNGA representing Museveni. Gen Ali took over and presented the report. At the start of his presentation, Gen Ali told Museveni he had seen some members were curiously interested in Mauritius Telecom and prominently gave Bahati as an example. He told the President “my colleague Hon Bahati has clearly been infected in this matter.” He categorized Byaruhanga as being ambivalent and couldn’t rule out bias on his part. Ali also referred to Tumwebaze saying he was impartial and helpful through the process. Nevertheless, Tumwebaze was absent at the 24th meeting. Bahati took exception to the strong language Ali was using to imply he had a thing for Mauritius. He protested and asked the President to ensure that part describing him as “infected” does not become part of official cabinet record for that day. Bahati said if they don’t tame their tongue, leaders like Ali risked demoralizing “other colleagues from taking up cabinet assignments in future.” Ali tactfully targeted Bahati and Byaruhanga because he knew these were some of the eloquent speakers that would support Evelyn Anite who was a vocal Mauritius Telecom supporter in the meeting. He calculated this to put them on the defensive and prevent them from eloquently defending Mauritius Telecom. He then presented his full report showing the financial and technical capabilities making Taleology suitable for the deal. In their business proposal, Taleology promises to invest $230m procuring network equipment for UTL revamp in the first three years. When Ali completed his presentation, questions started. Museveni offered to answer many of them clearly betraying his preference for Taleology to take the UTL deal. The clear indication of where the President stood cowed many and swayed opinions against Mauritius Telecom. As we reported in our yesterday story (titled How Morgan Tsvangarai’s Widow Moved M7 on UTL), Museveni had had numerous interactions with Morgan Tsvangarai’s Zimbabwean ex-wife Apostle Locardia Karimatsenga Tembo, an influential power broker for the Nigerian firm. These interactions had convinced him about Taleology’s suitability for the task at hand. Locardia had also appeared before the Rugunda committee where she offered to ring SA President Ramaphosa to speak to Rugunda during the meeting corroborating her information regarding Teleology Holdings. In his presentation, Moses Ali also said that UTL creditors badly wanted their money. He added that under the Insolvency law (applicable to companies under administration like UTL has been), government risked being sued by those creditors for choosing Mauritius Telecom (offering less money) at the expense of Nigerians who were giving almost twice more. “What creditors primarily want is their money and not the technicalities some people are insisting on. Let’s have them in mind as we decide this matter,” Ali said. This is something Museveni later corroborated upon in a manner that left many wowed with his eloquent lecture about Insolvency law.
MUSUMBA & AJEDRA’S TIME;
Immediately after Ali came Minister lawyer Isaac Musumba who lectured cabinet about insolvency law. Gabriel Ajedra, who some thought had spent the whole night reading and cramming things, too defended Ali’s conclusion. Then came Bright Rwamirama who also emphasized the need to prioritize creditors’ interests over and above anything else. He unusually spoke very well. Next was Lands Minister Betty Amongi who initially supported those decampaigning Taleology for lack of experience doing the same telecom work and the money. Saying her colleague Anite was right to insist on that point, Amongi however said “let’s give them time and our conditions and wait to see how they fail otherwise there is no sense in sidelining the one offering higher money in favor of one offering less.” The eloquence and confidence with which Amongi spoke prompted the First Lady Janet to nod in approval. Evelyn Anite at this point rose up saying: “Mr. President this is why some people hate me. I’m for the truth always and nothing but the truth.” Janet, who had spoken earlier for Taleology, returned to the microphone and said “there is no other truth apart from choosing the firm that has offered more money.” She added: “It’s as simple as that and I don’t see how anybody is hated for the truth because there is only one truth.” Sarah Opendi, renowned for her boldness and high quality contributions during cabinet sessions, also spoke reinforcing Janet’s point. She said the issue of whether Taleology has the money or not shouldn’t be over emphasized “because even the Chinese investors who developed the Osukur phosphates industrial complex in Tororo initially didn’t have the money.” She said “all they had was the offer and commitment from government and the money came later and it’s now up and running. It’s a project worth over $600m.” Museveni, who had been quiet for a while, burst out saying “you are very right my sister because even banks fund ideas and not assets.” The AG Byaruhanga was restrained through the session and only spoke when Museveni prompted him towards the end asking if legally there was anything wrong giving the UTL deal to the highest bidder. The AG said there was legally nothing wrong but suggested Mauritius Telecom be given another chance to revise and raise their $45m offer upwards. Members, who were already swayed having clearly seen where majority including the President stood, rejected Byaruhanga’s suggestion to give Mauritius Telecom another chance. There was also concern that giving UTL to a telecom owned by a foreign government would in the long term be detrimental to Uganda’s security and sovereignty. “Many of the Ministers that would have defended Mauritius, that was being spearheaded by Huawei Uganda top executives, made a U-turn and kept quiet having clearly seen what the President wanted,” says a source privy to the UTL meetings. Before closing debate on the matter, Museveni gave a prolonged lecture in which he belittled and demystified many of the points earlier speakers had made bashing the Nigerian firm (Taleology) not knowing the big man had done his own research and fully understood why it was the most suitable. Museveni also said that with such a high concentration of seasoned telecom executives, Taleology as a company didn’t have to have done telecom business before since the big names behind it knew what to do and had the requisite connections to mobilize the required funding. Examples of the big names behind Taleology include Adrian Wood of UK who mentored and is a godfather to many of the best MTN CEOs now overseeing MTN telecom markets in Africa, Asia and Middle East. Others are the likes of the founder of Airtel India, TIGO group that famously operated in Rwanda & Tanzania, ex-MTN Uganda CEO Noel Meier & Dirk Smets who as CEO founded MTN Cameroon. Each of these has over 20 years of executive position experience in the telecom industry in markets not very different from Uganda. Museveni also explained that Taleology Holdings was being used by these big names as a Special Purpose Vehicle (SPV) and even explained at length what that (SPV) means and by the time he finished his submission, members were ready to vote for the Nigerian firm and call it a day. One of the ministers, who had supported the losing Mauritius Telecom, broke down crying saying their views had been misunderstood yet they too meant well for Uganda.
BIG LOSS FOR HUAWEI;
Mauritius Telecom’s defeat is very bad news and big blow for Huawei Communications Uganda whose top executives were the proxies through whom Mauritius was coordinating all the efforts to get the UTL deal which they narrowly missed. Cabinet sources say that being the major telecom network equipment supplier for MT back home in Mauritius, Huawei Uganda is the one that interested Mauritius Telecom in the UTL deal and made the necessary connections. The Huawei executives had their eyes on the resultant juicy deals in case MT had qualified including supplying things like switches etc that are required to operate and maintain a telecom network. Sources say MT had planned to invest over $200m in the first few years and more than 80% of that would go in procuring network equipment deals that Huawei was well assured of had their MT partners succeeded.
