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Shareholder Lockout: UDC Faces Setback in Munyonyo Business Deal

“Government to Allocate Additional Funds to Public Centers Over Private Defaulters in Anticipation of NAM Conference.”

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The Uganda Development Corporation (UDC) was established in 2016 as the investment arm of the Ugandan government. One of the entities listed in Schedule 2 of the UDC Act that UDC was mandated to acquire an interest in was Munyonyo Commonwealth Resort Ltd. Consequently, UDC took over the government’s investment in Munyonyo Commonwealth Resort, amounting to UGX.15.061 billion, representing a 25% capital injection into the company. The remaining 75% shareholding, worth UGX.45.184 billion, is owned by private sector investors.On December 6th, 2021, the Executive Director forwarded transfer of share stock forms executed by the Ministry of Finance, Planning, and Economic Development to the Uganda Registration Service Bureau for action. However, a review of records relating to the takeover revealed that UDC had not yet completed acquiring the share certificate. This lack of share certificates as evidence of stock ownership denies UDC the right to participate or inquire in business activities.

The Ugandan government is partnering with Munyonyo Commonwealth Resort to set up a conference facility for the Non-Aligned Movement (NAM) Summit in 2024. The estimated project cost analysis dated 27th April 2022 shows that the convention facility will cost USD.47.15 million (over 174 billion UGX), with funding from UDC, MIL, Uganda Development Bank, and a shareholder’s loan from UDC. On 2nd September 2022, Speke Resort Convention Centre Ltd (SRCCL) was incorporated to own the conference facility, with each shareholder owning a 50% stake in the company. However, it was discovered that the private investor had underpaid its capital contribution by UGX.5.69 billion, which may negatively impact the projected construction costs and require the government to inject more funds if not paid. These revelations are part of the Auditor General Report for the Financial Year 2022/ June 2023

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