How corruption is eating down Uganda Airlines

Cornwell Muleya speaking during a recent event when Uganda Airlines took delivery of its second A300-800neo

 Before being sent on a three-month forced leave, Cornwell Muleya, the Uganda Airlines’ chief executive officer (CEO), had sent a confidential note to President Yoweri Museveni which he hoped would save him from an impending investigation intended to cure the problems at the airlines.

Muleya’s brief was sent to Museveni on January 27, but it fell short of impressing the head of state that he (Museveni) reportedly directed for his suspension and six other senior bosses at that the Works and Transport minister, Gen. Katumba Wamala effected on April 27.

Muleya was handed a three months suspension together with Paul Turyacayisanga (finance director), Joseph Ssebowa (head of human resource), Harvey Kalema (manager ground handling and operations), Bruno Origi (director safety and compliance), Moses Wangalwa (head of procurement and assets disposal) and Alex Kakooza (first captain), to pave way for an internal investigation. 

While Katumba Wamala tried to downplay the suspensions, his junior, Joy Kafura Kabatsi, the state minister for Transport did not hide anything from the media.

She went ahead to pen a letter to the Uganda Airlines board chairman, Perez Ahabwe, expressing her displeasure with how the board was managing the affairs at the airline. Kabatsi also threatened to suspend Ahabwe and his entire board.

The developments came before the national carrier’s second anniversary of its return to the skies after 17 years in the aviation limbo.

In his brief to Museveni, the CEO tried to take the blame away from him by highlighting governance issues between the board and the airlines’ management.

The five-page letter, a copy of which The Witness has obtained, Muleya told Museveni that the board government picked to oversee the airline’s operations is not competent enough since none of the board members has a background in the aviation industry.

“Whereas this is true (that none of the board members have an aviation background), management has taken the Board through a comprehensive induction program to ensure they are properly oriented into the specialties of the airline industry so that they can appreciate the issues facing the company and the experience and skills required to oversee a successful airline,” Muleya wrote.

He accused some board members of trying to push for the promotion of self-interest instead of concentrating on safeguarding the interest of airlines.

“This unhealthy practice has led them into trying to interfere in management areas especially in the areas of procurement and staff recruitment in the airline,” he stated.

Muleya also told Museveni of incidents where board members have tried to connive with some of the airline’s managers in corrupt schemes such as invoice loading. Such schemes, he said, have also previously drawn in key people within government ministries.

“This attempted collusion between some board members and some managers has tended to divide the management team and has brought inefficiency in the management structures of the company which has made managers working with such backing to slow down key airline projects as they attempt to push their agendas while at the same time feeling protected by some people on the board and at ministries,” Muleya stated.

“Procurement managers have been particularly problematic because they have also worked with people in government ministries to find ways of making money from the airline. Fortunately, as the accounting officer, I have been able to stop the majority of such schemes since each major procurement requires the Accounting Officer’s signature to go ahead. As CEO, I have on several occasions sanctioned these staff members to desist from such practices but they have always rushed back to complain to their protectors either at the board or in the ministries where they have been reassured that the current CEO being a foreigner is going to be changed and they should not cooperate with him but wait for a new Ugandan CEO who will do their bidding to come,” Muleya wrote.

He further claimed that some board members told him that he is “being too rigid and inflexible” which had made it hard for some people to work with him.

“They advised that I must try to understand how business is done in Uganda because these practices are normal in this country, otherwise I will find myself alone. They have gone so far as to suggest that our ethical approach management may be one of the reasons why we are experiencing delays in the release of company project funds from the ministries within government,” he said.

To facilitate quick transfer of funds for the airline’s projects, Muleya wrote, the relevant government officials need to get some kickbacks.

“This expectation was reinforced recently when ministry internal auditors and auditors from the Auditor General came to the airline to perform their audit reviews. I was advised by my staff in finance that the first group asked to be paid $50,000 [Shs 182.5 million] in order to give a good report on the airline, to which I said no,” Muleya wrote. 

Another group of auditors reportedly asked for money in the range of Shs 100 million and Shs 150 million.

ABBAVATER

Before celebrating its first anniversary, Uganda Airlines was already choking on debts some of which resulted in litigation battles with media houses and other suppliers over unpaid fees.

In June 2019, Uganda Airlines contracted Abbavater advertising as its brand and communications agency ahead of the resumption of its commercial flights in August 2019.

“This agency was introduced to the airline by the former commercial director [Jennifer Bamuturaki] and the company first dealt with this agency during the CR900 aircraft receiving ceremony on April 23, 2019. When the company was contracted to do this work, management was not aware that some of the managers within the airline, including the commercial director whose duty it was to manage this service, had intimate connections with this company,” Muleya wrote.

“This ugly act only came to light after the agency’s services to the airline were found to be below par to a point where management had to recommend to the board to terminate their contract. Further probing also revealed allegations that this agency had either bribed their way into the company or attempted to bribe some managers at the airline in order to get the contract,” he added.

The PR firm entered into advertising contracts with various media houses but failed to pay despite submitting claims to the airline and being paid for the costs.

It however never paid for the advertising services and other services it procured on behalf of Uganda airlines.

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