TRALAC - Trade Law Centre

Ugandan MPs Query AGOA Firm

Wednesday, 05 November 2003

Source: The Monitor (Kampala)

Ugandan lawmakers have raised questions over the ownership of Apparels Tri-Star, the Ugandan apparel manufacturer subject to much negative publicity in recent weeks.

Members of Parliament also questioned the perks that government has been giving the textiles firm, which exports garments to the United States under the African Growth and Opportunity Act.

On the first day of Parliament after a month on recess, MPs were bound to ask questions about the affairs of the firm, which sacked 298 female employees, popularly known as Agoa girls, after they went on strike on October 21.

The Minister of State for Finance (Investment), Mr Sam Kutesa, had been called in to provide some answers to those questions.

But it was clear very early on that he would not satisfy all the MPs when he failed to present the agreement signed between government and the company. Kutesa, who was appearing before the Parliamentary Committee on Finance, also failed to name the shareholders of the company - raising eyebrows among some of the MPs.

Kutesa told the MPs that government had, through the Uganda Development Bank, granted Tri-Star a loan of $3.6 million (Shs 7.4 billion) to get it off the ground.

But the MPs pointed out that in the memorandum of understanding - the only official document they have between the firm and government - Tri-Star was supposed to get a loan of only $2.5 million (Shs 5 billion).

"Where is the agreement for the $3.6 million?" Mr James Mwandha (PWD) asked, without getting an answer.

Other MPs were irked about the lack of information about the identity of the owners of the textiles firm.

"We don't know who the owners of Tri-Star are in this country," Mr Harry Kasigwa (Jinja Municipality West) said. "You even don't have an agreement you only have a memorandum of understanding."

He added: "I have information that Tri-Star was thrown out of Botswana. This company we are being told is financially sound does not own industries in Sri Lanka. They just run franchises in Sri Lanka."

The MP alleged that the equipment brought in by the firm had been rejected in Botswana.

"Why should we spend on briefcase businessmen? How do you open up the state coffers for some foreign quack investor and yet we have local investors?" he said.

Mr Jack Sabiiti (Rukiga) was more concerned about the lack of transparency in the whole affair.

"This company will not benefit this country if it is benefiting individuals. Why is government not being open with what is going on?" he said.

When he spoke again, Mwandha threw a rather large spanner into the wheels.

Said Mwandha: "Allegations are coming out that the company belongs to President Museveni. The fact that we cannot access the file of this company in the office of the registrar of companies shows suspicion. Why is Agoa managed under State House?"

But Kutesa protested.

"You can't make any speculative allegations and get away with it. Where is the evidence that Museveni owns Tri-Star? I challenge anybody to produce it," he said.

But the MPs were not done with the Bugolobi-based firm. Mr Henry Banyenzaki (Rubanda West) said: "Tri-Star are exploiting the country's taxpayers. This company supplied under-size uniforms to the army."

"Tri-Star was given an advance of Shs 1 billion by the army," Kasigwa added.

Mr Aggrey Awori (Samia Bugwe North) said that Tri-Star's financial woes would blow up government's opportunity to access the Agoa market in the United States. However, Mr Dinesh Wellala, the general manager at the textiles firm, dismissed the allegations when contacted last evening.

"The allegations by the MPs are rubbish," he said, "the uniforms we supplied to the army were okay. We did not bring in used equipment from Botswana; the equipment we brought in is brand new. We have the documents for the equipment."