Kampala contracted a non-existent Libyan firm to export garments to the US under the US sponsored Africa Growth and Opportunity Act, The East African has learnt.
While the Uganda government purported to have entered into an agreement with LAP Textiles Ltd, a subsidiary of the Libya Africa Investment Portfolio — LAP Mauritius, to take over the AGOA textiles business, the Public Accounts Committee has been told that the firm did not legally exist at the time a Memorandum of Understanding was signed between the two parties.
The Uganda government claims that on June 25, 2007, it contracted the Libyan firm to produce and supply garments to the US under the AGOA arrangement. Kampala also signed off its stake in a textiles factory to the latter.
According to the MoU between the two parties, LAP was described as a private limited liability company incorporated under the laws of Uganda set up to carry out the business of textile manufacture, spinning and weaving among others.
The agreement shows that the Libyan firm acquired a 60 per cent stake in a textiles facility previously managed by Apparel Tri-Star (Uganda) whose services had been terminated over mismanagement.
The other shares were distributed between the Uganda government (35 per cent) and one Kananathan Veluppillai (five per cent). Mr Veluppillai was the managing director of the defunct Tri-Star.
But an inquiry from the Registrar General through Katuntu and Company Advocates, which the PAC engaged to investigate the deal, has established that the Libyan firm had no legal base in Uganda at the time it was engaged.
“I have searched our records and established that M/s Libya Investment Portfolio-Lap Mauritius does not exist on our company register,” Darius Ruta observed in a letter dated March 26, 2008 addressed to Katuntu and Company Advocates, which he signed on behalf of the Registrar General.
Instead, Mr Ruta noted that another firm, M/s Lap Textiles Ltd, was incorporated on February 26, 2008 and issued certificate number 96255.
Filed under: AFRICAN NEWS | Tagged: AGOA, CORRUPTION, UGANDA
