Uganda Airlines bosses face criminal prosecution

Uganda Airlines (UR, Entebbe/Kampala) former directors and executives have until this week to explain why they should not be prosecuted on allegations of corruption and mismanagement.

Uganda’s Daily Monitor newspaper, citing sources close to the investigation, reports that Acting Works and Transport Minister Francis Musa Ecweru has ordered implicated officials to show cause in writing within five days from August 13, 2021.

This comes after President Yoweri Museveni ordered the dissolution of what he called a “dysfunctional, if not incompetent” board. It follows an investigation by the State House and The Public Procurement and Disposal of Public Assets Authority (PPDA) public spending regulator that has resulted in at least 14 charges of corruption, collusion, and mismanagement against the Board.

Those under the spotlight are former board chairperson Perez Ahabwe (a former Cabinet Minister from 2009 to 2011), and ex-board members Benon Kajuna (director of transport at the Ministry of Works and Transport), Godfrey Ssemugooma, Catherine Asinde Poran, Charles Hamya, and Rehema Mutazindwa.

The former senior management team lead by suspended Chief Executive Officer Cornwell Muleya has also been ordered to explain itself. They include Paul Turacacysenga (director finance), Joseph Ssebowa (human resources manager), Moses Wangalwa (procurement manager), Deo Nyanzi (sales and marketing manager), Roger Wamara (commercial director), Andrew Tumusiime (senior administration manager), Michael Kaliisa (quality manager), Bruno Oringi (safety manager), Harvey Kalama (ground operations manager), Kenneth Kiyemba and Alex Kakooza (both pilots) and Juliet Otage Odur (crew training manager). They were placed on forced “leave” in May 2021 after an Auditor-General’s report showed the airline had lost UGX15 billion shillings (USD4.1 million) in the Financial Year 2018/2019 and UGX102 billion (USD28.5 million) in FY2019/20, with UGX168 million (USD45,815.42) in interest financing costs.

Transgressions reportedly range from bribery, extorting money from job applicants, bungling procurement contracts, nepotism, maintaining ghost workers on the payroll, and giving jobs to unqualified pilots. Investigators said an accountable manager had approved pilots with less than 500 flying hours on the airline’s four CRJ900LRs to attend training for its two A330-800Ns. Questions are also asked why the certification of the CRJ900LRs was never concluded. Timelines are being reviewed of the delayed certification of the A330-800 Neos – 5X-CRN (msn 1979) and 5X-NIL (msn 1977) – that were delivered from Airbus in December 2020 and January 2021 respectively and were supposed to have entered international service in March 2021. New ground handling equipment that remained unused for months is also being investigated.

In procurement deals, State House auditors and PPDA investigators found causes of fraud and forgery, falsification of documents, best-evaluated bidders presenting forged tax clearance certificates; poor record-keeping, poor planning, unfair evaluation, unjustified use of direct procurement, missing payment records, contracts signed against expired bids, and irregular procurements.

Allegations against the board include:

• involvement in recruitment leading to corruption;
• collusion with management in nepotism;
• flawed procurement and mismanagement of contracts;
• poor risk analysis, management, implementation; and follow-up;
• micro-management of daily operational matters;
• inability to supervise the certification of aircraft;
• approval of high costs expenses without due diligence;
• lack of performance scorecards for the senior management team;
• lack of functional and active committees;
• ignoring security vetting;
• retaining pilots that failed simulator training; and
• soliciting bribery.

Management issues flagged include:

• Muleya’s failure to curb corruption amongst officials;
• delays in the start of service of the two Airbus aircraft;
• delays in implementing a self-service project;
• gross procurement exceptions;
• poor market price assessment on procurements;
• lack of transparency in purchases;
• retrospective procurements;
• instances of possible collusion and misuse of public funds;
• irregularities in tenders;
• signing contracts against expired tenders;
• missing contract signatures;
• failure to appoint contract managers;
• irregular advance payments;
• awarding contracts without approval from the Solicitor General;
• irregular procurement processes;
• receipt of unsolicited bid;
• revenue leakages;
• unethical recruitment processes;
• retaining pilots who had failed simulator training;
• ignoring security vetting;
• uncoordinated crew training; and
• lack of transparency in purchases.

In a letter to the Works and Transport Ministry seen by the Daily Monitor, the President directed that the matter be handed over to the Inspector General of Government (IGG) for possible prosecution.

Meanwhile, the ministries of transport and finance have been directed to handle operational matters at Uganda Airlines until advised otherwise.

The President also announced the government was looking to appoint a new commercial director, preferably an expatriate with international experience, whose first assignment would be to restructure the commercial department. In his letter, the President noted that Uganda Airlines’ organisational structure was marred by disorganisation, improper staffing, duplication of roles, structural gaps in responsibilities, work processes, and lack of accountability.

He ordered an update in strategy development, performance analysis, proper coordination, and key performance indicator-based performance management. All staff would be re-assessed (except those already subjected to KPI).

Uganda Airlines was incorporated in 2017 and conducted its maiden flight to Nairobi in August 2018.