Auditor General John Muwanga has, in his latest report, faulted private shareholders of the Atiak Sugar Factory for failing to provide their capital contribution to the company leaving the burden to the government.
The government owns 40 per cent of the shareholding of M/S Horyal Investment Holding Company (HIHC), the implementing company for Atiak Sugar Factory. The rest of the 60 per cent shareholding is owned by private investors.
The Auditor General noted that the government fully contributed its 40 percent share capital amounting to UGX 80 billion, and provided shareholder’s loans to the company.
On 30th October 2017, the nominal share capital for the company registered with the Uganda Registration Services Bureau (URSB) was UGX 200 billion in 20,000,000 shares of UGX 10,000 each.
“…there was no evidence to confirm that the private shareholders had provided their capital contribution to the company,” Muwanga wrote.
Ms Amina Hersi Moghe, a prominent businesswoman, is listed as the Chief Executive Officer of the investment company on the Atiak sugar factory website.
However, Muwanga said that whereas the shareholding provides for two members out of five on the Board; the government represented by Uganda Development Corporation, only has one member on the Board implying inadequate representation of the government.
The government has over six years, availed a tune of UGX 459 billion for investment into the company, through Uganda Development Corporation (UDC).
The Auditor General also indicates some of the funds remain initialised.
Of the UGX 459 billion, a balance of UGX 66 billion remained unutilized with the Development Corporation at the close of the financial year 2022/2023.
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The government through the National Agricultural Advisory Services opened two (2) Letters of Credit in the financial year 2019/2020 amounting to UGX 17.33Bn in favour of the investment company to undertake bush clearing, land preparation, planting, weeding among other activities.
In addition to the Letters of Credit of UGX 17.33 billion, further funding amounting to UGX 51.96 billion was availed by NAADS to the company for investment in sugar activities, making a total of UGX.69.29Bn through NAADS.
Out of the Letters of Credit of UGX 17.33 billion opened in 2019/2020, UGX 15 billion had not performed by the close of the financial year 2022/2023.
Muwanga advised the Uganda Development Corporation Accounting Officer to ensure better stewardship of government Investment in the company through liaising with the management of NAADS to ensure that the unutilized government funds on the non-performing Letters of Credit are returned to the Consolidated Fund.
Atiak Sugar Factory has suffered several setbacks such as procurement delays, cane shortages and wildfires.
According to the Uganda Development Corporation website, the sugar factory was commissioned by President Museveni in 2020 and has since the commencement of commercial operations produced and sold 11,902 tonnes of brown sugar.
More than half (56.2 per cent) of the sugar is sold within the country and the balance is exported.
As a bi-product, the company has produced and sold 8.577 tonnes of molasses. In total, the factory has so far generated UGX 23,283,666,000; about 94.5 per cent of this income is from the sale of sugar, the main factory product.
