The National Social Security Fund (NSSF) has redeemed its interest in Nsimbe Holdings Limited acquiring a total of 830,68 acres of prime land located at Nsimbe, Seeta, Mpigi district, 21 KM’s from Kampala city and 300metres off Kampala-Masaka Highway.
In 2004, the National Social Security Fund went into joint venture with property mogul Mugoya Isabirye, the owner of Mugoya Estates to “equitably share the assets of the defunct joint venture” to construct 5,000 housing units.
The deal provoked public fury after Mr Mugoya was given 51 per cent shareholding for his contribution of Sh8.5b worth of 843 acres of land on Masaka Road, but critics said his contribution was worth Sh4b.
On November 5, 2007, the Constitutional Court ruled that the multi-billion Nsimbe deal was illegal because NSSF had entered the joint venture without clearance from the Attorney General, the government legal adviser.
The $225m project for 5,000 housing units was being undertaken by Nsimbe Holdings, a joint venture between Mugoya Estates and Premier Development Company, a subsidiary of the National Social Security Fund.
Mugoya Estates had purportedly contributed Ugx. 8.5b worth of land for the deal, giving it 51% ownership of the venture while Premier contributed Ugx. 8.2b to form Nsimbe Holdings Ltd.
In the deal which started in 2004, NSSF paid $4,561,058 (over Shs8 billion). But allegations of financial impropriety in the transaction were made and the project was suspended on the recommendation of the IGG.
In 2005, the then IGG Justice Faith Mwondha, declared the project illegal and done in bad faith. Some officials of the Fund were prosecuted and others like the former Gender Minister Zoe Bakoko Bakoru had their cases dropped after she became a fugitive. She fled to the US to escape prosecution in a case that was riddled with political undertones
The development is a result of protracted effort by the Fund since 2012 to redeem the fund’s initial Ugx. 8.2 billion investment in Nsimbe Holdings Limited, made in 2004, that had been written off and convert the fund’s 49 percent shareholding in Nsimbe Estate Limited into land, an asset that the Fund could develop in future.
In order to actualise both the above, on September 13, 2016, the high court endorsed a consent judgement decree between the Fund and Mugoya Estates Limited, the majority shareholder in Nsimbe Holdings Limited, the judgement provides that:
Mugoya Estates Limited recognizes the interests of NSSF in the Joint Venture Company then called Nsimbe Holdings Limited
The Fund acquires the Mugoya Estates Limited 51.2 percent shares in Land at Nsimbe
Mugoya Estates Limited offers the Fund first option to purchase its 51.1 perent share in the piece of land at market price
In accordance with the procurement guidelines, the Fund, acquires 51 shareholdings in the land at Nsimbe held by Mugoya Estates Limited
The transaction is positive development for the Fund, its members and country at Large because:
It allows the Fund redeem its initial investment and acquires a valuable asset in prime location
It allows the Fund to recover its initial investment of Ugx. 8.2 billion in Nsimbe Holdings that had been written off.
It allows the Fund to obtain a high value asset (830,68) acres of good land at market rate that can be used for future developments.
The NSSF is one of the richest public entities in Uganda and in the region, with over Uganda shillings three trillion savings, but perennially suffers the misfortune of engaging in scandalous development projects including the Temangalo land saga (worth Ugx.11 billion) and Pension Towers under construction on Lumumba Avenue in Kampala. The building was described by sacked NSSF boss Chandi Jamwa was to cost Ugx. 36 billon, but the costs more than doubled before its foundation was complete.