Top officials of dairy cooperative in trouble over Shs 600mln UDB loan
KIKUUBE-Top officials of Kyangwali Dairy Cooperative Society Limited in Kikuube district are in trouble for allegedly mismanaging Shs 600 million borrowed from the Uganda Development Bank [ UDB ].
Julius Kwesiga and Edward Tumwesigye, the manager and chairman of the cooperative, respectively were arrested and interrogated last week after Kikuube district resident commissioner [RDC], Amlan Tumusiime convened a meeting following a request by the cooperative’s members.
The cooperative runs a dairy facility at Kyarushesha constructed and equipped with a milk cooler with funds from the African Development Bank ADB under a government program dubbed Community Agriculture Infrastructure Improvement Project [CAIIP].
The duo who are now out on police bond, landed into trouble after the members of the cooperative led by its vice chairman, Amos Busheshere and Jason Kuyunga the chairman supervisory committee, hired an audit firm [Amon and Associates] to audit the books of accounts.
Forged minutes of AGM
Findings in the audit report show that the Kwesiga and Tumwesigye forged minutes of an annual general meeting [AGM] dated 30-July 2020, which they used to process the loan from UDB.
The two suspects supposedly acquired the loan to construct a valley dam, purchase heifers, splay race, and boost the working capital of the cooperative. However, auditors established that only Shs 137.5mln of the borrowed funds was used to buy heifers while the remaining money was misused.
The audit report further indicated on August 27, 2021, Kwesiga wrote to UDB instructing them to transfer Shs 150mln meant for purchasing heifers to the bank account of E.K.T. Agrilife Enterprise CO. Limited in DFCU bank to fund the purchase of 50 heifers. E.K.T. Agrilife Enterprises CO Limited belongs to Tumwesigye.
The report shows that the Shs150mln wired to E.K.T. Agrilife Enterprises CO Limited was not used to buy the heifer; instead, the heifers were purchased using part of the funds [Shs 462.5mln], which were disbursed to the cooperative account.
Cost of heifers questioned
The 50 heifers were allegedly purchased at Shs 2.75mln each and distributed to a few cooperative members.
The auditors in their report added: “The cost of each heifer was inflated; we computed after interviewing over eight beneficiaries of the heifers and found out the average price per heifer was Shs 1, 775,000. The price of the heifer was overstated by Shs 975,000 leading to a total financial loss of Shs 48,750,000.”
The report also indicated that there were no documented criteria that were followed to distribute the heifers, something that the auditors said signifies that the two officials distributed the animals to members of their interest.
Money distributed to selected members
The report indicates that part of the loan money was distributed among only 19 members out of 147 members of the cooperative.
“Shs 248, 700,000 was distributed to 15 members without loan Application forms, we noted that Out of 19 members who took loan only nine… members filed and signed application loans agreement with the cooperative and the rest [10 members] took loans worth Shs133, 500,000 without a written and signed agreement. Our observation on all loan agreement, except for Zedekiah Mwine is that there is a likelihood that they were not signed by real borrowers, “the auditors said.
Corruption revealed further
It was also discovered that three people who included Edward Tumwesigye, Godfrey Bagabo and Steven Rutesire were given Shs 5000, 000 each as appreciation fees for allegedly offering their land titles as security to UDB. However, the audit report indicates the land title which was mortgaged to UDB for a loan belonged to the board chairman Tumwesigye.
The report indicated Shs 2, 500,000 was paid to UDB officers whose names were not disclosed in the report, as a token of appreciation for approving the controversial loan.
Report recommendations
The report recommended several measures which include transferring Shs150mln from E.K.T. Agrilife Enterprise CO. Ltd account to the cooperative’s account, management to seek permission from members during the AGM, and advising the management to recover Shs 48, 750,000 from the manager and the Chairman.
It also recommended that the members who took the loan present guarantors and security and recover Shs 2, 500,000 which was given to UDB officials.
Following the findings of the audit report, the cooperative’s members are now demanding that the manager and chairman step down to pave way for a thorough investigation.
Kwesiga and Tumwesigye are also being accused of mismanaging savings of the cooperative’s members worth Shs 100mln, leaving behind only Shs 220,000 bank account.
Board failing to convene AGM
They are also being accused of failing to convene a general meeting, something which members say has kept the two in office beyond their stipulated period.
Members of the board are supposed to serve for two years but they have spent four years in office without the consent of the cooperative’s members.
The members are also accusing Kwesiga and Tumwesigye of failure to account for Shs 100 deducted from each litre of milk sold by cooperative society by farmers.
From 2018 to 2022, the farmers sold over 590 litres of milk which made Shs 590mln but they say there is no accountability for the money.
Tumwesige refutes allegations
However, in a phone interview, the board chairman Tumwesigye disputed the audit report, saying some of the information in it is false and misleading.
He noted the auditors did not give him a chance to provide clear information, adding some members want him out of office.
https://thecooperator.news/jobs-ministry-investigates-kikuube-district-over-corruption/
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