How Minister’s Son Used Questionable Mining Licences To Spirit Away Shs21bn From UNRA
Details on how State Minister for Minerals, Peter Lokeris’s sons beat a court order and spirited away Shs21bn UNRA cash in bogus payment have emerged.
The shrewd boys have been identified as Ben Koryang and Felix Oroma. Welt Machinen Engineering, a company owned by the above minister’s sons was this year paid Shs21bn by UNRA as compensation for a contentious rock used by Chinese firm China Road and Bridge construction Company Ltd (CRBC) in the upgrading of Nakapiripiti-Moroto Highway.
UNRA first wired Shs9bn to Welt Machinen Engineering Ltd on January 29th to the company account in Cairo International Bank. Another batch of Shs11,676,688,374 was released last week from High Court
registrar’s account number 003130058000001.
UNRA had deposited the money with court to till the case is disposed of.
“It has come to our clients knowledge that Shs11,676,688,374 belonging to our client has been paid by UNRA through the registrar High Court. Proof of payment is attached. These are contested payments which are subject of a standing interim order maintaining the status quo,” said George Omunyokol, the Chinese firm’s lawyer in a letter dated June 26th, 2017.
“Given the history of this file, where there were previous concerns raised by our clients, about the active processing of the contentious funds through the secretary judiciary, yet there was a general
reluctance by the court to dispose of the application for an interim order, our clients are apprehensive that there might be a grim possibility of our clients’ money being spirited away from, in spite of an interim order, maintaining the status quo, being in force.”
Welt Machinen Engineering claimed it had mining rights around Kamusalaba rock in Nakapiripiti district.
However, documents obtained by this website indicate Lokeris’ sons obtained the license a month after the CRB had already entered into an agreement with Nakapiripiti district and clash the rock.
This was further reinforced by Soroti High Court civil suit number NO: 16 of 2014.
The trial judge Henrietta Wolayo averred that Welt Machinen Engineering Ltd did not have a license over Kamusalaba rock which was being quarried by CRBC but over Atumtaok because they introduced the Kamusalaba rock after their application for the licence had been lodged and got two licenses 1194 and 1195.
The trial Judge found that there was no Atumtaok village but there was Atumtaok rock and Kamusalaba rock aka Nakumama both found in Longoleyek village.
“Welt Machinen Engineering Ltd did not erect beacons and did not know which areas were specifically for which license and the coordinates for both licenses were the same and the witnesses including the Mining Engineer Okewling John Kennedy could not tell the location of each license though he said he had visited the area,” Wolayo ruled.
M/s China Road and Bridge Construction Ltd (CRBC) was awarded and subsequently signed the contract for upgrading the Moroto —Nakapiriti road (93 km) with the Uganda National Roads Authority (UNRA) on the 21 August 2012.
Based on the factual materials report produced by UNRA, CRBC embarked on establishing the ownership of the identified quarries or source of rock materials along the project; settling for the quarry at Namalu
(Kamusalaba) which is 64 km from Muyembe.
Since this quarry was situated on communal land, CRBC engaged the local leadership from the Chief Administrative Officer, then Kisembo Moses Bahemuka, the Deputy CAO. llukol Jobs Lomenen and the Sub—County Chief of Lorengedwat, Okello Tonny Agaza.
Arising from the successful engagement of the local community, CRBC entered into an agreement with the Nakapiripiriti District Local Government on the 13 May 2013 to operate a quarry and extract rock for
road building purposes from Kumusalaba.
Under this agreement, the Nakapiripiriti District Local Government confirmed that they were the registered owners of the said rock and CRBC was required to pay a consideration of Shs50m to exploit the rock.
Following this, CRBC engaged a qualified Ugandan firm to prepare an Environmental and Social Management Plan (ESMP) for the road project including identified quarries, and this ESMP was approved by the National Environmental Management Authority.
The specific certificate of approval of environmental impact assessment for the quarry at Kamusalaba in favour of CRBC was issued by NEMA on the 17th September 2013.
Soon after CRBC had reached settlement with the local leadership represented by the District Local Government of Nakapiripriti, the Minister of State for Mineral Development, Peter Teko Aimat Lokeris, paid CRBC a visit claiming that the land on which the quarry at Kamusalaba was based belonged to him.
The community leadership of Lorengedwat wrote to the district leadership of Nakapiripiriti on the 18th June 2013 protesting and denouncing the false ownership claims by Lokeris to otherwise
community land that their leadership had ceded to CRBC for national development.
The CAO of Nakapiripriti, Bahemuka went further to write to the permanent secretary of the Ministry of Energy on 30 January 2014 requesting that the license issued to Lokeris’ company (Welt Machinen
Engineering Ltd) be revoked in order to avoid disruption to a national project or Moroto —Nakapiripiriti which was being built using the same resources they had licensed out.
We have since established that on the 16 August 2013, the Ministry of Energy issued a location license for 2 years in favour of Welt Machinen Engineering Ltd to carry out small — scale prospecting and mining operations after they paid fees amounting to Shs850, 000 only.
The company also paid Shs200, 000 on June 4th 2013 only for a prospecting license. Armed with a prospecting license only, M/s Welt Machinen sought to disrupt the activities of CRBC purporting that they intended to commence commercial production of granite for road grade gravel.
By this time, CRBC had already established Shs7bn crushing equipment on the same site and was producing crushed rock for the road works. “M/s Welt Machinen did not demonstrate any mobilization or ability to establish at this site and it was therefore apparent that given these circumstances, the sole intention of securing the so called license was to speculatively disrupt and hold at ransom CRBC whose contract with UNRA would be frustrated at high cost by their actions,’ said Shen Xiaolin, Assistant Country Manger CRBC.
“Unknown to CRBC, M/s Welt has since sued CRBC claiming UGX 8.6 Billion as profits for 5 years for two rocks (Atumtaok and Kamusalaba) in Soroti High Court. However, judgment by Hon. Justice Henrietta
Wolayo found no merit in their claim after confirming that M/s Welt had no mineral rights on the Kamusalaba rock which CRBC was exploiting.”
HIGH COURT KAMPALA
After this setback, ‘M/s Welt Machinen moved to Kampala High Court and filed a suit against the Attorney General claiming among other things that; it was the lawful holder of the mining license of
Kamusalaba, CRBC had trespassed upon the said area and illegally and unlawfully mined granite, and UNRA owes CRBC substantial amounts of money which should be paid to Lokeris’s sons.
The said suit was heard and determined on its merits and judgment was delivered. Welt Machinen Engineering Ltd filed an appeal but did not prosecute the Appeal and its time ran out on the 13th September 2016 and CRBC filed a cross – appeal, then it applied for extension of time within which to file its appeal and it was granted hence Civil Appeal No. 52 of 2017.
Upon vacation of the order withholding the Shs8.5bn belonging to CRBC, demand letters were written to the UNRA Executive Director demanding that CRBC be paid their money which was withheld and any
other balance that had not been cleared but the Deputy Attorney General, Mwesigwa Rukutana wrote to the Executive Director advising them not to pay any money due to CRBC until the account is rendered.
CRBC then wrote to UNRA further raising concerns regarding the Attorney General’s advice which was contrary to the Court order. Welt Machinen Engineering Ltd Vs Attorney General on Friday the 21.10.2016, Welt Machinen Engineering Ltd moved to Kampala High Court and filed the above suit against Attorney General on the same facts, cause of action and in reference to Soroti High
Court Civil Suit No. O16 of 2016 claiming amongst others the following: It was the lawful holder of mining license 1194 in respect of Kamusalaba, CRBC trespassed upon the said area and illegally and
unlawfully mined granite, UNRA owed the Judgment Debtor – CRBC substantial amounts of money which should be paid to the Welt Machinen Engineering Ltd and not the Attorney General, It was the lawful holder of mining license 1194 in respect of Kamusalaba, CRBC trespassed upon the said area and illegally and unlawfully mined granite.
Under unclear circumstances, the office of the Attorney General filed a defense admitting all claims of M/s Welt Machinen despite the Soroti judgment which was to the contrary. Aware of the Soroti facts, , the office of the Attorney General went on to file a defence admitting all the claims of Welt Machinen
Engineering Ltd even after being served with a plaint that had a judgment rendering the claims by Welt Machinen Engineering Ltd resjudicata.
The Attorney General admitted; The rock mined under Licence LL1194 which is Kamusalaba rock belonged to it and Welt Machinen Engineering Ltd, Payment of the commercial value be made to it as ordered in Soroti High Court, Shs10,505,182,390/= of the money belonging to CRBC be paid to it, All the monies should be paid to the Attorney General.
However, the trial court in Soroti had found that Welt Machinen Engineering Ltd had no rights over Kamusalaba rock and therefore could not plead the case for Welt Machinen Engineering Ltd as it did.
The Attorney General further agreed with Welt Machinen Engineering Ltd that UNRA pays to the Attorney General UGX 10,505,182,390/= of the money due to CRBC. The Judgment was to the effect that CRBC renders its account to the Attorney General of how much rock it had used and make payments.
The above figure arose from a valuation of the rock used at Kamusalaba by staff of the Ministry of Energy and Mineral development; John Kennedy Okewiing – Mining Engineer, Gabriel Data – Geologist and Gerald Eneku – Mines Warden. This valuation was done without the participation and/or involvement of CRBC.
Based on that valuation and a letter from Kabagambe – Kaliisa, the then Permanent Secretary of the Ministry of Energy and Mineral Development, the Attorney General agreed to a judgment on admission
RBC went on to file an application for review, Misc. Appln No. 876 of 2016. The application was heard by the same Judge who heard the matter in Soroti, Justice Henrietta Wolayo. UNRA applied for an interpleader to allow it deposit Shs9.150bn in Court. This money was duly deposited in Court. The judge then delivered her ruling in two phases. In the first part of her ruling she found that the claim of Welt Machinen Engineering Ltd was resjudicata and ordered that the Government Valuer determines
the monetary value of the rock. CRBC was not given an opportunity to challenge the report of the Government Valuer.
In her final ruling, Wonyalo who was transferred from Soroti to hear the same matter, this time, awarded Welt Machinen Engineering Ltd UGX Shs16.298bn to be paid by UNRA or Secretary to the Treasury and the Attorney General UGX 4,786,537,000/= to be paid directly by UNRA.
The balance of money ordered to be deposited in Court as per the Court Order was to revert to UNRA.
CRBC immediately applied for stay of execution. The Application for an Interim Stay of Execution was only axed after a complaint was written to the Chief Registrar.
This happened because the registrar, Muse Musimbi could not sign the application because the file had not been brought to his attention for execution yet it had been taken to the Execution Division.
The file was taken straight to execution division who referred it to the Secretary to the Judiciary for payment.
0n the 27th day of March 2017 an Interim Order staying execution was issued but the Respondents; Welt Machinen Engineering Ltd and the Attorney General claimed that the money had already been paid to them.
Kagole Kivumbi, Secretary to the Judiciary later went ahead to swear an affidavit stating that he had already paid out the money which was deposited by UNRA with the Judiciary by the time the application was heard.
MONEY ON ACCOUNT
Sensing money was on way and the circumstances surrounding it, Welt Chinen Engineering Ltd opened a new bank account in Cairo International Bank. The signatories changed from Lokeris’s sons to Ben Koryang and Felix
Apo to Felix Apo Oroma, Andrew Muhwezi and Princess Nuwahereza. “The signatories to the said account shall be Felix Apo Oroma, Andrew Muhwezi and Princess Nuwahereza jointly to sign cheques , effect withdraws and endorse all transactions relating to the account,” a resolution filed on April 9th 2015 reads
We have since established that the Inspector General of Government has ordered investigations into the dubious payment. The matter was discussed in cabinet on Wednesday and the deputy IGG Miriam Wangadya was tasked to lead a team of investigators to look into the payment.
Officials from UNRA, judiciary, Ministry of Finance, Energy and attorney generals chambers will be quizzed.