Well, when the Ministry of Finance brought this proposal of the Government buying shares in ROKO to Parliament, we thought it was a joke but our investigations have found shocking details, some we will not write now but it is a very bad deal on the side of Government/ taxpayers.
ROKO is a local construction company and we are wondering what makes it so special to get a whopping 200.13 Billion from the Government moreover worth of shares and interest is not guaranteed nor is the return of this money.
Is it not a scheme for the directors and owners of this Company to get a retirement package and disappear? Who owns this special company and who are the real directors? This company has taken up major Government construction works and you can not convince me that out of the blue it is bankrupt? If it is bankrupt, let it declare so and UPDF’s construction brigade takes over than stealing from our national coffers.
Members of Parliament and the concerned citizens wary of Gov’t, Roko shareholding deal.
The government’s proposal to enter into a shareholding agreement with a local construction firm, Roko Construction Limited has raised eyebrows and will continue among Members of Parliament on the Committee of Finance, Planning and Economic Development.
Last week, the Minister of State for Finance (General Duties) tabled a proposal for the government to purchase 150,000 preference shares in Roko Construction Limited worth Shs202.13 billion.
The request was directed to the Committee on Finance for scrutiny.
While meeting MPs on the Finance Committee chaired by Hon. Keefa Kiwanuka on Tuesday, 12 July 2022, Roko Construction Limited officials led by their Managing Director, Mark Koehler justified the move saying it will be “an exciting investment” to have government as a preferred shareholder to raise its liquidity prowess.
However, MPs were not convinced about the proposal that could see government borrow over Shs202 billion to buy shares in Roko saying there is no guarantee of returns on investment since dividends are only premised on profits with little or supervision from the government.
“Why is Roko selling preference shares to the government yet the company’s Articles of Association do not allow buying of shares? This looks like borrowing or a loan being advanced to Roko rather than an investment. This arrangement means that government cannot participate in decision making,” Hon. Xavier Kyooma (Ibanda North) said.
Butambala County MP, Hon. Muwanga Kivumbi wondered why Roko that has been boasting of a healthy financial status is looking for an investor yet the construction firm could have explored other options such as seeking a financial undertaking with Uganda Development Bank (UDB).
Kashongi County MP, Hon. Herbert Tayebwa Musasizi suggested that rather than selling preference shares to government, Roko should join the stock market in search for shareholders to inject money into the operations of the firm.
“Roko is a limited company that has been making profits. In 2018, they made profits of Shs790 million, Shs2.8 billion in 2019 and only made a loss of Shs3.4 billion in 2020. It should therefore, be able to finance its working capital,” Tayebwa said adding that, ‘this transaction only favours Roko with no monetary gain from government’.
“This is an investment on the side of Roko and a debt on the side of government. Whereas Roko has the privilege of paying dividends after profits, government has an obligation to interest on the money it borrowed from the bank. So why is government going to borrow money to pay Roko and at the end of the day, come out with nothing? Suppose the company does not make profits?” he added.
According to Dr. Joseph Kibuuka, Roko’s transaction advisor, government’s interests will be well protected in the new shareholding agreement with flexible terms of reference. That Government will have two members on the board from line Ministries and these members have veto rights on the decisions taken by ROKO.
For us, as citizens, we see this as a very organized mafia work to dry taxpayers’ coffers by individuals who are highly connected in this Banana Republic of Uganda even when fuel prices are high, basic commodities including food are very expensive to the extent that there are more people who can no longer afford one meal a day.
Art teachers needed a simple increase on their salary but they were told there was no money
A section of Ugandans especially in Karamoja and some parts of the Northern and Eastern region are starving, people are dying of hunger and our Government wants to give out money to a few individuals who run ROKO. Let the company borrow like any other company so as to undertake the major projects.
We shall furnish you our esteemed readers on who owns ROKO and who intends to have a share of this 200.13Billion mafias are pushing to get from Government.