The dust has settled now since last week’s less than
surprising revelations that junior finance minister Evelyn Anite feared for her
life, threatened by a Mafia, cartel or cabal working within government and
against her.
She attributed this to her resolute stand in the UTL saga.
UTL was put under receivership last year. Attempts to flog it off to one
investor or another have come to naught. Anite called for an audit of the
company which under the law of receivership she cannot do. When a company goes
into receivership the interests of the creditors supersede those of the owner.
Anite disregarded this point of law and tried to ram through
an audit of her own, which was frustrated at every turn. She argued that as the
line minster she wanted to know the true state of the enterprise, which among
other thing she feared was being stripped off its assets illegally.
"The problems of UTL while they seem to have burst into the public conscience in the last few months have been simmering under the bonnet for long before it was hived away from the old Uganda Post & Telecommunications Corporation (UPTC)...
Lack all other parastatals then and since the parent company
was dogged by political interference and bad management. UTL was seen as the
jewel in the crown the others – Posta
Uganda and Post Bank, the other companies that resulted from the split were
seen as weighing down UTL.
But as it turned out without its monopoly of the sector, UTL
could not compete in the cutthroat world of competition and was relegated to
back bench and sometimes totally forgotten as a player in the industry. This
despite its huge asset base in infrastructure, buildings and land. Which just
goes to show management and insulation from political interference is key.
The botched up privatization of the company has seen it
change hands from a shadowy group, which claimed association with German
telecommunications management consulting firm, Detecon to the Libyans and back
wholly to government.
In the mean time the industry has gone so far ahead of the
floundering company as to make It unattractive as an investment option.
"The public haranguing of the company’s administrator by Anite has only served to drive its market value further down....
Everyday that is spent squabbling overt UTL makes it more
certain that it will be liquidated, its assets sold off to pay for its
liabilities and the company closed all together.
This is not the first time that uncoordinated troop
movements by our ruling elite has doomed companies to the graveyard of history.
Two companies spring to mind.
At the end of the last century government tried to sell a
controlling interest in Coffee Marketing Board (CMB). It had fallen into disuse
with the liberalization of coffee marketing in the country. As a going concern,
like UTL it was struggling. It had a book value, mostly comprised of its land,
storage facilities, its aging office block in Bugolobi and near obsolete
four-million bag a year processing plant.
The companies book value flattered to deceive at about $40m
misleading MPS that they were being conned when bids were put out for 49% of
the company and Swiss coffee trader Sucafina offered $8m, the highest of three
bidders. MPs jumped in cancelled the tender offer and called for a redo the bid.
The second time around Sucafina were the only bidder and they this time offered
$4m. That was the end of that. CMB eventually just drifted off, fell of the
coffee industry map.
Uganda Airlines taking to the skies again this week was a
good reminder of what happened to its predecessor. The old Uganda Airlines had
been reduced to flying one route – the Entebbe-Nairobi route and was a constant
drain on state resources. Fueled by pseudo nationalism MPs warded off suitor
after suitor for the airline – British Airways and South African Airlines among
them, arguing that they were offering too little for the tarnished family
silver.
With the failure to get a credible investor government shut
down the airline.
"Interestingly again the political elite have pushed for a revival of the airline even as there is no business case for it, hiding behind vague nationalistic sentiment...
The point is, as Anite is learning, politics cannot override
everything, especially economics and business. When the politicians try to
subvert the laws of economics and business they may be seduced by the initial
gains but these are only temporary and only dig us deeper.
UTL is dead we should bury it to stop it stinking up the
place.
