Security Minister Maj Gen Jim Muhwezi has said his ministry is aware of all allegations regarding the financial solvency of Joint Stock Company Global Security, a Russian company that was recently awarded a 10-year contract to install digital monitoring system in all motorcycles and vehicles in Uganda.
Gen Muhwezi says that as it was earlier clarified by the Attorney General Kiryowa Kiwanuka, the project has long been in the pipeline and it’s details agreed upon prior to his appointment as Minister of Security last month.
“Nevertheless I want to reassure the public that the terms of the contract provide the Government with clear rights and protections should the alleged circumstances materialise,” Muhwezi tweeted on Wednesday.
A few days ago, it came to the public attention that Joint Stock Company Global Security was facing bankruptcy litigation in Moscow. This is according to data about the company from Honest Business website, which curates information about businesses and companies in Russia.
The company is also facing other debt-related cases filed between 2019 and 2021 in Russia, raising questions of whether the contract in Uganda is a lifeline the company needs to beat off bankruptcy litigation for its very survival, and whether government of Uganda did adequate due diligence before engaging Global Security.
However in a phone interview with URN, Kiryowa said government isn’t aware of any bankruptcy order issued against the company.
“Yes, the contract was brought to my office, we approved it and we believe there is no risk, Uganda is not exposed to anything at all,” Kiwanuka told the media outlet.
“Contract was approved by my office taking into consideration all the laws of this country and we are certain that we don’t have any order of bankruptcy issued against the company.”
Joint Stock Company Global Security Company registered as a small business of 10 employees in 2013 and the firm returns for last year were 637,742 russian rubles equivalent to USD8,000.
It was sued by LLC “Rus Prom-Technologies”, another Russian company that wants it declared bankrupt. The case was filed in the Arbitration Court of City of Moscow on September 17th 2020 and accepted on October 20th 2021.
“On September 17, 2020, the Moscow Arbitration Court received an application from Rus-Prom-Technology on the recognition as insolvent (bankrupt) of JSC Global Security,” a ruling by the Arbitration Court of City of Moscow dated 20th October 2020 says. “Having considered the received application and the documents attached to it, the court considers them sufficient for the acceptance of the application for hearing.”
Though the case was accepted for hearing, the hearing sessions have been postponed several times as Global Security fight to pay the debt its owes Rus-Prom-Technology.
In another case filed in March 2019, Rus-Prom-Technology had sued Global Security for failure to pay 16.6 million rubles (Russia currency) which is about $220,000. Rus-Prom-Technology won the case.
After winning the case, Rus-Prom-Technology proceeded to file case in which it wants Global Security declared bankrupt. For Global Security to fight off bankruptcy, court has ordered it to pay Rus-Prom-Technology.
Global Security has also been sued by Limited Liability Partnership “Orken Alem” for a debt of 8.5 million rubles and Gu Main Department of the Pension Fund of the Russian Federation for failure to pay 10,000 rubles (about $135) and 455,00 rubles (about $600). All these cases were filed between 2019 and July 2021.
After eyeing a lucrative deal in Uganda, the company allegedly registered again on the 10th of this month as a Small Medium Enterprise (SME) in Russia. Meanwhile, the tech company doesn’t even own a digital website.
And last Friday, Uganda signed a contract with the Russian firm to provide digital trackers to all vehicles in the country.
At a ceremony held at the Office of the President in Kampala, Waiswa Bageya the Permanent Secretary in the Ministry of Works and Transport and Yunus Kakande his counterpart in the office of the President signed on behalf of the government while Ivan Sukraban, the Chief Executive Officer of Joint Stock Company, a Russian digital security company signed on its behalf.
According to Kakande, the President instituted an inter-ministerial committee that for the last four months has been working on identifying and the right company to carry out the task.
Kakande said that President Yoweri Museveni directed that all vehicles and motorcycles be fitted with tracking devices to help deal with criminals who he said use vehicles and motorcycles to kill people and then disappear without a trace. Museveni made similar comments in the aftermath of the assassination attempt on the life of Gen Edward Katumba Wamala in June.
Kakande said that the Russian company is going to run the project for two years and recoup their investment and then hand it over to the government of Uganda to manage.
Speaking at the same ceremony, Maj Gen Muhwezi who witnessed the signing of the contract assured the country that the only purpose for which the government is going to track vehicles is to deal with insecurity. He added that they have no intention of interfering in the privacy of citizens. When challenged on the law they are basing on Muhwezi said whatever they are doing was embraced by government technocrats like the Solicitor General.
He added that those who believe that the government is acting outside the law, have the right to challenge it in court.
On when the project is expected to start and how much money car and motorcycle owners are going to be paying, Muhwezi said the committee will be deciding on these details in the coming days.
“The investor is going to come on the ground to establish centres in the different parts of the country working with Luwero Industries to start and then the public will be informed when each vehicle will be called to be registered to get new number plates with monitoring systems.
The payment will also be communicated because always registration of vehicles is not free of charge; anybody who owns a vehicle will meet that charge,” Muhwezi said.
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