Kampala

A company owned by new Information Minister Mary Karooro Okurut and former MP Margaret Muhanga received a 49-year lease to a prime piece of land in the city owned by Uganda Broadcasting Corporation to build a footwear factory – only to put it on the market four days later.

Extreme Innovations Ltd, which was set up in August 2008, received the lease on December 7, 2009, put the land on the market on December 11, 2009 and sold it in July 2010 without paying a cent for the land.

No money
The firm was supposed to pay UBC Shs954 million for the land and was supposed to pay 100 per cent of the sum at the signing of the lease agreement. However, Ms Muhanga, the former Kabarole Woman MP and a director in the firm told Daily Monitor last night that Extreme Innovations (EI) did not have money to pay UBC and instead sold on its interest in the land to Sino East Africa, a Chinese trading firm.

Ms Muhanga, who is the president of EI, said she did not remember how much her firm was paid for the land but Paul Wanyoto, representing Sino East Africa said the Chinese firm paid EI $150,000 (about Shs360 million at current exchange rates).

Police recently arrested the top managers and board members at UBC, the public television broadcaster, in connection with alleged internal fraud and the irregular sale of the institutions’ assets.

The transaction between UBC and EI is one of many now under investigation, police sources said.
Ms Okurut, who is also the Woman MP for Bushenyi, confirmed she is a director in the firm but declined to comment on the matter in detail.

Ms Muhanga had earlier defended the transaction in a telephone interview with Daily Monitor yesterday. “There is nothing wrong with selling legally acquired property like we did. We bidded and waited for a year and a half before we were finally allocated the property,” she said.

Documents seen by this newspaper show that former Information Minister Kirunda Kivejinja in directed the UBC board before March 2009 to allocate two acres of land to EI to set up a footwear factory.

Ms Muhanga said the firm was given swampy land, which the company decided was too expensive to develop. “We realised it would cost us $500,000 just to seal and level the land. We approached Sino East Africa our neighbours who said they were interested in buying to expand. We wrote to UBC to allow us dispose of the land and they approved.”

It is not clear why the firm did not carry out due diligence before applying for the land – and why UBC allowed a firm that had not paid for the lease to sell on its interest in the land. Land in the area is currently valued at about Shs2.4 billion per acre. The other two directors in the firm, Dr Edward Nyatia and Mr David Kibuuka Kasozi, were unavailable for comment.

The land leased to EI was meant to be used only for a footwear factory but it is not clear whether Sino East Africa had similar plans for the land. Sino East Africa went on to accumulate about 10 acres of land in the area but cheques paid to UBC bounced when presented to the bank but Mr Wanyoto, a lawyer said the cheques were issued as security but not for presentation.

The police are also investigating city businessman Hassan Basajjabalaba who acquired a lease over land that UBC had leased to a Kenyan firm under unclear circumstances.

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