Tough vet­ting rules crip­ple NSSF board

Nom­i­nee of trade unions’ um­brella body re­jected for not meet­ing the re­quire­ments set by the reg­u­la­tor

The East African - - BUSINESS -

By BERNARD BUSUULWA

onded by their unions. Out of nine board­room slots, three were re­served for the trade unions, with Notu al­lo­cat­ing one and the re­main­ing two go­ing to the Con­fed­er­a­tion of Trade Unions (Coftu), a ri­val um­brella labour group.

Whereas Coftu nom­i­nated two mem­bers who passed the reg­u­la­tor’s re­quire­ments, all Notu’s nom­i­nees failed the test for rea­sons that could not be es­tab­lished by press time.

But se­vere dis­agree­ments among Notu’s ex­ec­u­tives over selec­tion of the board nom­i­nees and a con­flict be­tween the trade union um­brella body and the Fi­nance Min­is­ter over the Uganda Re­tire­ment Ben­e­fits Reg­u­la­tory Au­thor­ity (URBRA) are cited for the neg­a­tive vet­ting out­comes.

Though the Fi­nance Minother is­ter gave Notu a De­cem­ber 7 dead­line to sub­mit fresh nom­i­nees for vet­ting, it is not clear if diplo­matic ef­forts pur­sued by the Fund’s deputy manag­ing di­rec­tor to re­solve the prob­lem have yielded fruit.

Fol­low­ing Notu’s fail­ure to sub­mit com­pe­tent nom­i­nees for vet­ting and ex­piry of the for­mer board’s term in Septem­ber, NSSF Uganda spent three months with­out a board of di­rec­tors — a risky de­vel­op­ment who can to loss of in­vest­ment op­por­tu­ni­ties in the event of trans­ac­tions that re­quire board ap­proval.

A case in point was the sus­pen­sion of the for­mer NSSF board of di­rec­tors in 2004 over fraud­u­lent ac­qui­si­tion of more than 100 acres of land lo­cated along the Kam­pala-masaka High­way that be­longed to Nsimbe Es­tates Ltd. Sub­se­quently, the Fund spent nearly a year with­out a board of di­rec­tors — a sce­nario that de­nied it par­tic­i­pa­tion in the New Vi­sion Ltd IPO in 2004 and sev­eral se­condary stock mar­ket deals, sources said.

How­ever, NSSF Uganda has suf­fered lit­tle com­mer­cial da­m­age from the ab­sence of a board of di­rec­tors this time round on ac­count of a de­ci­sion taken by the for­mer di­rec­tors to fast track all in­vest­ment ap­provals be­fore the end of their ten­ure in Septem­ber amid fears of a slow and dif­fi­cult suc­ces­sion process,

has learnt. “Notu is di­vided on their nom­i­nee to the new NSSF board and it is also bi­ased to­wards cer­tain peo­ple it has se­lected to rep­re­sent it on the board re­gard­less of their com­pe­ten­cies. But I be­lieve most of Notu’s fights over the board­room slot are driven by a de­sire for in­flu­ence in the Fund and not money alone,” said Patrick Byabakama Kaberenge, NSSF board chair­man.

In spite of the fairly small fees of­fered to NSSF di­rec­tors, the Fund’s rapid growth pat­terns, which saw it gross more than Ush10 tril­lion ($2.6 bil­lion) in as­sets last month, have cre­ated a de­mand for big un­der­ly­ing op­por­tu­ni­ties of­fered by the Fund in form of fat pro­cure­ment con­tracts, high pay­ing jobs and big cor­po­rate do­na­tions.

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