By Joachim Twino
There are indicators that the year running between 2017 and 2018 has been one of the worst for telecom giant MTN Uganda. And indeed telecom sector pundits say the recent removal of influential Anthony Katamba from being General Manager Legal to GM Sales was part of the broader efforts by MTN Uganda to reverse this very frightening trend. As we reported in our previous story (see Report shows how MTN Workers Stole Ministers/MPs’ Shs400M AS Katamba is fired), the prominent Kiwatule resident who partly grew up in Mbarara was replaced by Enid Edroma formerly of NIRA. But away from Katamba’s uncompromising approach that saw many would-be avoided disputes escalate into litigation against MTN, the telecom giant has had many other low key moments between 2017 and 2018 which we are reflecting upon in this special report.
STAFF EXODUS/SEX SCAMS;
Even when it’s perceived to be a well-paying entity, the telecom giant has lost many high level seasoned managers that haven’t been easy to replace. Failure to prolong retention of the very best talent will always be construed as evidence of internal strife, tensions and management failure in any organization. MTN hasn’t been exceptional to this notwithstanding the billions it exploitatively mints from the Ugandan people every month. Those who have controversially left include Chief Marketing Officer Isaac Nsereko, seasoned marketer Aggrey Kagonyera, CTO Eng Bogere Miti (now with Airtel Tanzania), head audit Richard Mutesasira, HR official Moses Sesanga (now heading HR at MPL) and Francis Kazinduki to mention a few. MTN Uganda also lost Phillip Besimire who is now CEO MTN South Sudan. Ironically some of these have left very acrimoniously and haven’t ruled out dragging the telecom giant to court. They know a lot regarding MTN business secrets and haven’t hesitated collaborating with its competitors like Airtel Uganda, Africell and others. In fact Airtel Uganda has since overtaken MTN when it comes to cashing in on the voice (calls) business leaving MTN to only dominate market share on mobile money transactions. “Whereas they are officially operating quietly in town as private consultants, those former employees could also aid business spying by MTN rivals because they know everything having served in top echelons at MTN,” said one of the telecom industry watchers we spoke to for this news article. There is also Brenda Mahoro, the legal commercial officer who was acrimoniously fired allegedly for refusing to sleep with one of the top bosses at MTN. She is officially quiet but her experience has since sparked hushed discussions in the corporate circles regarding existence of deeply-seated sex syndicates in MTN Uganda one of whose expatriate bosses sometime back divorced his wife back home and ratified his sex relations with a PA. “Its common practice in that building for bosses to sexually prey on their PAs,” said a knowledgeable insider insisting that existence of sexpest bosses in the MTN Uganda countrywide network is widespread. That a top executive can, in blatant abuse of power & privilege, maliciously cause the firing of a female employee (as was the case for Brenda Mahoro) is indicative of how ineffective the MTN Uganda sex harassment policy is-if it exists at all. In a properly functioning corporate organization, there should be internal complaint mechanisms through which such an employee can get a remedy and generally be protected against arbitrary expulsion prompted merely by one top official who was aggrieved not because of her failure to deliver but insistence to protect her integrity as a woman, a fundamental right which even the Constitution jealously protects in Article 24. When she was eventually gotten rid of, Brenda Mahoro got a lot of backing from former employees who kept making solidarity statements because they remain aggrieved that whoever leaves, gets demonized by MTN using its internet platforms. There is one who recently missed getting a very big corporate job (bigger than he held at MTN) after his former employer, on being contacted, gave very negative comments about him. There are two previous sales managers that were contemptuously fired for merely failing to hit sales and revenue stream targets for the company. “Because the litigation and operating costs are too much and are ever skyrocketing, whoever heads sales will have to be stressed. In the end you either resign with grace or wait to be disgraced with a dismissal. That will happen once you fail to hit your sales monthly targets twice. And for Katamba, the new GM Sales, the ending is going to be very bad. He is coming to head the department at a time when the economy is contracting yet he will be expected to register growing sales to government, groups, individual and corporate clients. The market is increasing plummeting and it’s very unlikely he will hit the expected targets amidst the license renewal anxiety. He is coming to head a team of employees who actually don’t like him and it’s very likely they will be out to fail him,” one of the well informed MTN insiders told this news website.
OTHER LOW MOMENTS;
Away from staff-related issues, there are other challenges MTN Uganda or officials associated with it have lately been contending with including their Chairman Charles Mbire. Apparently the larger than life businessman isn’t having a good season in his other businesses. Staff are dissatisfied that as Board chairman he hasn’t exercised adequate control on top management resulting in marginalization leading to rampant exit of high level employees. Some fault him for not acting decisively with expected impartiality when disputes are reported to him. This has hurt his reputation amongst employees that used to regard him very highly as a seasoned entrepreneur. Some competitors say his political connections, initially with ex-Premier JPAM and now Ruhakana Rugunda, have partly contributed to the MTN success story and indifference over the years (featured very prominently at the last month introduction ceremony of JPAM’s daughter). Mbire’s large profile and the vastness of his political connections has sometimes cowed regulator UCC when it comes to cracking the whip on the telecom giant in case of noncompliance. Yet Mbire has in the same period suffered a couple of other setbacks. We shall restrict ourselves to those that are business-related. His BOMI Holdings was involved in the flopped RVR venture which was originally funded by the World Bank/IFC to revamp train/railway services in Uganda. At a time Mbire was BoD chairman, the WB/IFC funding ($200M) was used to purchase railway wagons that turned out not to be of the standard WB had envisaged. Subsequently, a very unflattering confidential report was written by WB showing why the RVR project didn’t succeed. Naturally such setbacks negatively impact on him and diminish his ratings as an individual. It’s also true that under Mbire’s leadership, MTN has tried unsuccessfully to enter the Kenyan market. The same MTN is also said to be scheming to upstage NSSF and dominate the pension’s market once the sector is liberalized. Pro-liberalization experts like Gordon Sentiba are understood to be favorable to the idea of MTN joining the Pension sector (upon liberalization) and cash in on the trillions NSSF has been monopolizing. President Museveni is said to be fully aware and very uneasy about the possibility of MTN crossing over to dominate the pensions’ sector because of the resultant dollar repatriation back home in South Africa. There are also reports, very frightening to the President, that there are plans by MTN Uganda to found a commercial bank riding on the very successful mobile money experiment.
The Kampala regime is nervous that founding a successful commercial bank will be another avenue for MTN Uganda to join Stanbic Bank and other South African entities to increase monthly repatriations of the scarce foreign exchange back home in South Africa. Closely related to the successful mobile money venture, MTN faces active hostility from Richard Mwami its former employee under whose care and supervision the Mobile money business was pioneered in 2010/2011 taking cue from Safaricom Kenya. Mwami productively used his time in MTN top management and he knows a lot. He is shrewd, fearless, naturally intelligent and renowned for taking risks. Efforts by MTN to prosecute him for alleged mobile money fraud didn’t succeed. Instead using the same court process, Mwami turned tables on the telecom giant and was awarded by court Shs3.5bn after his Ezzey Money successfully pleaded breach of (content provision) contract against MTN. This was two years ago and the precision with which he floored MTN has actually emboldened many former employees to begin taking the bull by its horns.
TORTURE CLAIMS;
Sources at Uganda Human Rights Commission (UHRC) intimated to this news website that UHRC Chairman Med Kaggwa and commissioner Med Mulumba have lately been approached by lawyers intending to represent some of the former MTN employees who were prosecuted or marginalized along with Richard Mwami who used to head MTN Public Access Bukoto which was the headquarter of mobile money. Such aggrieved ex-employees accuse MTN top bosses of riding on their close relationship with ex-IGP Kale Kayihura’s men like Jonathan Baroza to orchestrate torture aimed at extracting false confessions. There are already claims (some of them on court record) that top MTN officials hired Kayihura aide Nixon Agasirwe and others to torture MTN employees that would be suspected on leaking to public-spirited litigants like Fred Muwema information pointing at tax evasion. Prominent among notorious torture cases likely to surface at Kaggwa’s UHRC is one involving an MTN ex-logistics manager who was tortured by Kayihura’s men (at a fee) after falsely being accused of stealing MTN generators and inverter batteries. There was a policy at MTN to dispose of generators that have run for 100,000 hours as well as old inverter batteries that would be written off. For being found in possession of such written off items, many MTN employees suffered the torturous wrath of Nixon Agasirwe whose services some members of MTN top management used to hire just to tame employees they considered big-headed. This has previously been alleged on record by some of the parties MTN has had to counter in courts of law. Some MTN employees claim to have undergone torture after being falsely accused of stealing promotional materials for the company. “Now that Kayihura and his men have fallen, you can be sure many prior torture victims amongst MTN employees that had opted to keep quiet and move on are going to spring up with numerous petitions either in High Court or UHCR and its going to be very embarrassing for the corporate brand MTN has deliberately built and projected over the years,” said a knowledgeable source. This same source added that many of the aggrieved employees, intending to bring up torture suits, have ruled out any possibility for negotiations on grounds that HR Head Micheal Sekidde, who should ordinarily spearhead such reconciliation, is perceived to be too weakened and disrespected by the South African superiors at MTN Towers.
Victims of this MTN-induced torture claim that their bosses used to sit at Asna Club in Kololo where they would be joined by Nixon Agasirwe and other police bosses who would subsequently torture the targeted employees at a fee (just like they did to refugees). There are also allegations, according to investigative sources at UHRC that some MTN top officials used to appreciate police torture kings by donating to them i-phones and brand new laptops. The torture victims claim that apart from Nixon Agasirwe, Jonathan Baroza (notorious aide to ex-IGP) is another powerful police officer the torture-inducing MTN bosses would regularly meet at Asna Club Kololo late in the evenings to plot mischief against assertive MTN employees. Sometimes petty differences such as clashing over a beautiful girl would be sufficient to land subordinate staff/employees into torture trouble procured by an aggrieved superior. “Some police officers would be paid for just denying detained employees police bond and the same would be done to Mike Chibita’s State Prosecutors who ensured denial of bail to the same suspects,” recalls an MTN insider. Some MTN employees, Mwami inclusive, got into trouble for questioning the prudence in the MTN money that would be spent on endless renovations on Lugogo-based MTN Arena. The same group of employees always raised accountability questions against MTN officials who were close friends with big men in the National Council of Sports (NCS) which too is based in Lugogo where it controls most of the sporting facilities.
THE MONEY DEALS;
All these hitherto well concealed troubling occurrences are coming to the public domain at a time when even the MTN bosses, who are still hanging in there/that haven’t yet quit, are increasingly becoming divided into those who are eating much and those eating too little. Apparently, the latest fallout in members of top management (though still subtle) emanates from the envy some members of the MTN tender board developed after getting reports that a syndicate of some top company officials got a commission of $4m in the BAT premises-acquisition deal that saw MTN Uganda officially release $12m to acquire that property but in the end a difference of $4m was coughed back to be shared by some officials as part of the financial gratification for the deal. Those who claim to have missed out have since become very envious of those thought to have pocketed something off this property purchase deal. Jude Rugasira’s Knight Frank were the brokers in this deal that has since sparked controversy leaving MTN top management bosses divided like never before. This BAT property, along Jinja road opposite UMI, is currently being renovated and the corporate offices housing MTN top bosses will gradually be shifted from MTN Towers to this new home. Actually the current MTN Towers belongs to Prof Sam Sejaka’s Uganda Development Bank (UDB) from whom MTN has been renting. In fact the ex-BAT property on Jinja road is only coming 2nd to the Mutundwe Switch premises which was the only property MTN was renowned to own as opposed to leasing. Just like Stanbic bank, MTN has always been faulted for being reluctant to invest in building infrastructure to support its operations in Uganda. Critics have taken this as proof that MTN, already criticized for defying IPO calls, will after all only operate in Uganda for as long as there is still significant profit to be made and subsequently repatriated.
THE UCC DISPUTE;
Filed in April 2018, the MTN Judicial Review application against UCC is due for hearing tomorrow Tuesday 3rd July. MTN run to court after UCC as the regulator ruled in favor of VAS Garage, one of the very many Value added Services providers that have endured abusive relationship with MTN for years. VAS Garage became aggrieved after MTN, under the guise of implementing UCC mandatory “Do Not Disturb (DND)/Opt out” directive, expired/deleted their subscriber databases. This occasioned huge financial loss to VAS Garage-like VAS providers. Numbering over 60, they originally operated under WASPA-Uganda, an association that is on the verge of collapse after MTN money was deployed to gratify some members. The UCC DND directive was meant to eliminate unsolicited messages to telecom customers who would be charged for messages they never solicited for in the first place. Such customers had been petitioning UCC as a regulator. Whereas MTN maintained this expiring of databases was in fulfillment of the UCC directive of late 2014, the regulator asserted this was never the case. MTN was directed to own up the consequences of its “unfair business distortion.” Section 5(1) of the UCC Act 2013 mandates the regulator to receive complaints. Indeed when MTN deleted their subscriber database purporting to be complying with UCC’s DND Directive, VAS Garage in July 2017 lodged a complaint calling on the regulator to restrain the MTN impunity. UCC found that MTN was in fragrant breach of the Content Provision Agreement (CPA) it had signed with VAS Garage and other content providers. Parties were then encouraged to engage in dialogue & negotiations which resulted into VAS Garage placing a demand of Shs529m against MTN in damages and lost business opportunities as a result of what UCC characterized as “unfair business distortion” practices. MTN didn’t like the UCC finding and in April 2018 rushed to the High Court filing a Judicial Review application seeking to quash the UCC findings on grounds of procedural impropriety. MTN’s argument, as represented by Sebalu & Lule Advocates, is that UCC didn’t have jurisdiction to entertain the VAS Garage complaint because it bordered on breach of contract which UCC has no judicial powers to entertain. They are also challenging the manner in which the matter was investigated, parties heard and a decision eventually proclaimed. They assert that their right to fair hearing, as enshrined in Article 28 of the Constitution, wasn’t properly observed. They are aggrieved that UCC shouldn’t have entertained VAS Garage’s complaint because it was filed informally. John Bosco Sempijja, a senior legal & regulatory manager at MTN, in details makes out the MTN’s case in his affidavit in support that accompanied the Judicial Review application. In his affidavit, Sempijja makes many assertions which Kenneth Lenox Seguya, an eloquent senior legal manager at UCC, elaborately responds to in the regulator’s affidavit in reply which basically is part of their defense against MTN’s “vexatious & frivolous” application. First of all, Seguya brings out the hitherto unknown impunity and indifference with which MTN officials conduct themselves and treat others including disrespecting the regulator. Seguya shows the restraint and tolerance with which UCC has always treated MTN including during the 9 months period they took hearing out parties and investigating matters that they both (MTN & VAS Garage) raised between July 2017 and March 2018 when UCC delivered its verdict exposing fragrant breaches by MTN.
SAYS MUCH MORE;
Seguya’s affidavit discloses that when VAS Garage lodged the complaint in July 2017, UCC instantly notified MTN calling on them to defend themselves but in their usual indifference and I don’t care attitude, MTN officials only filed their defense 40 days later clearly breaching UCC practice regulations that prescribe a maximum of 15 days. Whereas this ordinarily would have led to MTN being condemned unheard, having implied forfeited its right to be heard, UCC overlooked this all and still accepted MTN’s response to VAS Garage claims. The MTN response was then duly shared with VAS Garage the complainant (by UCC) and within just 11 days, the very compliant VAS Garage bosses filed their rejoinder as required. This was an opportunity for them to substantiate more on their initial allegations against MTN. UCC on 23rd Nov 2017 called both parties to a hearing and UCC lawyer Kenneth Seguya again reveals how indifferently MTN behaved towards this invitation. The MTN officials, clearly considering themselves too big to be sanctioned, as usual took their time and 7 days later, they wrote to UCC asking for a new hearing date. UCC acted judiciously once again and rescheduled the hearing date to 14th December 2017 at UCC House Bugolobi. On the appointed date, both parties attended and MTN was represented by a high profile delegation and thank God, unlike on previous occasions, they didn’t storm out of the meeting in a manner that shows contempt for the regulator. They asked for 30 days to make written submissions and file the same to enable UCC arrive at a final decision. Whereas it’s them who chose the 30 days duration, MTN still wasn’t in a hurry to file their written submissions. Whereas VAS Garage delivered on 10th January 2018, MTN didn’t until 15th January only a few days to the deadline. Because of the tactical delays by MTN, the UCC ruling that was originally meant to be delivered by 16th February 2018 ended up being delivered on 27th March. MTN tried to escape the UCC regulatory scrutiny by arguing that it was procedurally wrong for the regulator entertain the complaint on grounds VAS Garage had filed it informally. Seguya says the regulator stuck to their guns because the relevant laws and rules mandate UCC to entertain all manner of complaints (filed formally or informally) as long as it relates to rendering of communication services in Uganda. In an attempt to circumvent the UCC decision, which Seguya says is about nothing but delivering justice and fairness to VAS Garage and placate other VAS providers against aggression, MTN grumbled while trying to create ambiguity between the UCC pro-VAS Garage decision and subsequent arbitration proceedings. Seguya implores Court to uphold the UCC findings and award damages against MTN, a renowned bully against whom many other VAS Providers (like SMS Empire) have ganged up and separately sued for breaches similar to what VAS Garage suffered. Seguya, whose views are corroborated by UCC ED Godfrey Mutabazi (as quoted by PML Daily) vehemently refutes MTN claims that the procedure followed during the 9 months trial of the VAS Garage complaint was irregular and defective and therefore led to miscarriage of justice against MTN Uganda. In the PML Daily interview, UCC officials are quoted faulting MTN for trying to use court to seek self-regulation on flimsy grounds that UCC is a biased regulator. Mutabazi is quoted as vowing to defeat MTN’s efforts to use court to oust the UCC jurisdiction to supervise them.
M7 PETITIONED/FURIOUS;
Yet there are many other potentially very costly legal disputes in court against MTN including one by Silva Musubika’s SMS Empire asking court to direct UCC not to renewal MTN license on grounds of profit repatriation (over Shs600bn is taken to South Africa every 6 months) and tax impropriety among other breaches. Repatriation has turned out to be the easiest case by MTN adversaries to make. It’s something about which even the President is very furious and said as much during the last Monday cabinet meeting as the UTL matter was being discussed. Museveni said he badly wants UTL revamped urgently because it’s one of the avenues he hopes to use to tame repatriation of dollars (basically foreign exchange) made in this economy by foreign-owned entities like MTN which has even obstinately thwarted calls to list on the Stock Exchange for native Ugandans to acquire increased stake in it. Sometime back, at the start of the year, some representatives of the aggrieved VAS Providers had audience with the President and they prompted him to pronounce himself on alleged under declaration of revenues made from mobile money transactions. And the young innovators, whom he is determined to protect against unfair business practices by MTN, urged the President to engage URA to obtain more information. They also told him it won’t be easy to decisively enforce total tax compliance against MTN as long as Commissioner Patrick Mukiibi still calls shorts at URA Headquarters Nakawa. The young innovators told the President that Patrick Mukiibi, a good friend of guys at MTN, had become too powerful at Nakawa and all URA officials bow before him except Polotazio (the head Audit) upon whom he doesn’t have much control. Museveni is understood to be determined to follow the Ghana example and ensure MTN is forced to have the IPO whether their very powerful chairman Charles Mbire likes it or not. Museveni also told the young innovators (VAS providers comprise mostly of such people) that to get to the root of the alleged tax evasion, he wants aspects like virtual export services, CSR initiatives through MTN Foundation & the so-called Shared Services between MTN Uganda and other countries forensically audited & comprehensively scrutinized with a view of ruling out the possibility of being used to diminish the telecom giant’s tax obligations. The Ugandan big man is also keenly looking into some of the tax obligations often escaped under cover of management fees in relation to MTN Dubai and MTN Mauritius. Transfer pricing is another area over which Museveni is itching to crack the whip on some inept officials at URA. In their 2nd case, SMS Empire are claiming over Shs24bn against MTN for illegally expiring or deleting their subscriber database and for breaching revenue sharing agreements. They claim that MTN acts resulted into the total collapse of their company that used to directly and indirectly employ hundreds of young ICT innovators whose current unemployment and destitution is of great concern to the President. Yet besides external disputes (including one filed by city lawyer Fred Muwema & another by Saatchi & Saatchi that formerly handled MTN PR etc), MTN also has cases filed by its former employees who consider the manner of their employment termination to have been procedurally improper. It’s this endless yet costly litigation that the MTN Africa Group CEO Rob Shutter confessed to stakeholders during an engagement, early this year, is very frightening and must be avoided. He was in Uganda for the Group’s beginning of year planning retreat and took off time to drive to Prime Minister Ruhakana Rugunda’s office for some meetings. It’s while there that he met some stakeholders, including lawyers representing some of the companies that have sued MTN, and told them his mind. He rightly told lawyers like Daudi Mpanga and Dr. James Akampumuza that litigation must be avoided because it costs MTN brand reputation, time and money. Sbu Luthuli the CEO Eskom Pension & Provident Fund (MTN shareholders), who has never stopped agonizing over the billions of dollars the Nigerian Court fined MTN some years ago for their negligent refusal to switch off unregistered subscribers, shares Rob Shutter’s views and he too has implored MTN Uganda bosses the same way. The two Group leaders have insisted MTN Uganda must prioritize out of court settlement/mediation in all cases filed against it but throughout the years of Mr. Anthony Katamba’s headship of the legal department that option was always been despised as indicative of corporate weakness rather than strength. Flamboyant city lawyer Fred Muwema too had commenced private prosecution against MTN alleging tax evasion and they only escaped scrutiny that would result from full court hearing after DPP officials curiously took over the case. And as they always do, the DPP officials later on bungled up the prosecution and had it discontinued on grounds that the evidence against MTN wasn’t sufficient. In another case, a former employee volunteered information resulting into URA so far recovering Shs1.5bn (out of 10bn) and has since been paid his commission worth Shs150m by URA. But being the relentless Counsel he is, Muwema has never stopped grumbling of betrayal by DPP Mike Chibita regarding the way MTN was enabled to get away with it. For comments, call/text/whatsapp us on 0703164755.
