The Committee on Finance, Planning and Economic Development has called for an audit on the assets and liabilities of Roko Construction Limited.
According to the committee chaired by Hon. Keefa Kiwanuka, it is prudent that Roko is subjected to a thorough financial audit to determine its current liquidity levels before government signs a Share Subscription Agreement to purchase shares.
This was during a meeting with the Uganda Development Corporation (UDC) Executive Director, Dr Patrick Birungi on Thursday, 14 July 2022 over government’s proposal to acquire 150,000 preference shares worth Shs202.13 billion in Roko. UDC is an investment arm of government mandated to facilitate industrial and economic development.
Dr Birungi told the committee that whereas it is imperative that government secures preference shares in Roko to salvage the local construction firm from liquidation, it is paramount that due diligence is done to ascertain its exact financial standings and verify its creditors.
“As a starting point, we need to do the due diligence at least on the creditors list, to make sure these creditors are real creditors. I am not sure we have had verification done, but we need to at least verify that list before approval. We need to do a thorough assessment of the governance and make sure our interventions do not go to waste,” Birungi said.
MPs were incensed why UDC did not carry out their mandate to conduct a thorough assessment and evaluation audit on Roko to inform government’s decision on the nature of investment it was about to sign.
“UDC should tell how much money is needed to do an evaluation audit other than coming up with figures that are not substantiated. We can give you two months to do this audit and provide a report to rely on,” Hon. Muhammad Muwanga Kivumbi (Butambala County) said.
In response, Birungi averred that UDC could not conduct a comprehensive assessment of the firm’s investment net worth due to financial constraints.
“It was just right for UDC to carry out the assessment because if you just say Roko was stressed then it was subjective. It is difficult to qualify the level of stress,” Hon. Moses Aleper (Chekwii County) said.
When Hon. Patrick Ocan (Apac Municipality) asked if UDC should conduct a forensic audit on Roko, Birungi said he did not have the expertise to do so. He advised that the forensic audit is conducted by the Auditor General.
Kasilo County MP, Hon. Elijah Okupa, queried how the finance ministry settled for Shs202 billion without a proper evaluation report to inform their decision.
“If evaluation was not done, then how did the Ministry of Finance come up with the figures? And how did they conclude that there are governance or managerial issues in Roko without evaluation?” Okupa asked.