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Telecom

Why govt is cracking the whip on MTN Uganda

MTN Uganda provisional license

On the night of July 2, 2018, agents attached to the Internal Security Organisation aka ISO stormed the MTN Data Center, which is located in Mutundwe, a Kampala suburb.

4 days after the raid, MTN Uganda issued a statement, indicating that the agents had vandalized the facility, severely impacting the processing of all Call Data details and resolution of customer queries.

The raid, MTN added, had also affected the processing of Service information for their different products and processing of business financial reports.

On July 9, the company issued another report in which its Chairman, Charles Mbire, was quoted saying that despite the vandalism, the agents failed to access their data, thanks to their impenetrable servers.

“At the Data Center, there were several attempts by the intruders, to log into MTN Uganda’s servers over a period of two hours. The efforts were unsuccessful because of MTN Uganda’s robust information security systems and no data were accessed or compromised by the intruders,” Mbire was quoted as saying.

A month and some days later, Col. Frank Kaka Bagyenda, who heads ISO was dragged to court alongside the Attorney General (AG). Nothing has come out of it yet.

Another bombshell

As the storm seemed to have settled at MTN Uganda, on January 19, 2019, another sweeping wind struck. This time the target was senior officials.

On that day, Olivier Prentout, MTN Uganda chief marketing officer, was arrested as he returned from a business trip in Rwanda. Authorities sent him back to France.

Two days later, his counterpart, Annie Bilenge Tabura, who headed Sales and Distribution at MTN Uganda was picked from her office and deported to Rwanda, her home country.

In a statement, police said the duo had been deported for engaging in activities that compromised the security of Uganda.

On Jan. 23, after enduring a four-hour interrogation by Ugandan detectives, Elsa Muzzolini, who was the telecom’s general manager for Mobile Financial Services was also thrown out Uganda.

The Italian national, the public would later learn through a leaked WhatsApp screenshot, that she was deported for funding the campaign against mobile money taxes that was spearheaded by the legislator Robert Kyagulanyi aka Bobi Wine.

Must read: MTN’s Charles Mbire denies being quizzed by security

To fan the flames at MTN, four days to make a month since the first deportation, security officers arrested and deported the Chief Executive Officer of MTN Uganda, Wim Vanhelleputte.

He was the next day replaced by Gordian Kyomukama, who was the technology chief, making it the first replacement that was announced to the public since the company started losing its executives in this extensive crackdown.

When Vanhelleputte was deported, MTN Uganda revealed that it had not been notified of the grounds for his deportation.

“We are understandably concerned about these developments and are engaging with the authorities to seek understanding that would lead us to resolve this matter,” read part of the statement issued by MTN Group Corporate Affairs.

Government speaks out

Government has now finally broken its silence on the deportation. In a recent interview with journalists, the government spokesperson Ofwono Opondo said Vanhelleputte was deported because he failed to make good on his promise.

The CEO, Opondo said, had promised to work with the government in rooting out the bad elements at MTN. But, he added, they were surprised to learn that he had flown out of the country to meet the deported MTN staffers.

“And CEO Mr. Wim was fully aware and he made commitment to the government of Uganda how he was going to make internal reforms to ensure that his staff do not use their privileged positions to undermine, to collude with other people to undermine the security of Uganda,” Opondo told journalists, according to an NTV video broadcast.

“To the surprise of the security in Uganda, last week Mr. Wim traveled to Dubai and held meetings with two people, the Italian and the French (…) who had been deported and security has credible belief that this meeting which he did not declare prior to his travel was perhaps meant to further espionage activities against Uganda.”

Undermining economy

According to the government mouthpiece, authorities are not after disintegrating MTN’s business, but they are after weeding out the bad elements who are using the company’s system to compromise the economy and security of the country.

Opondo says MTN has for several years been under-declaring its revenue, thus cheating government on tax collections.

“This is not against MTN the business company, this move is against some MTN executives who we have credible evidence that they are using their position to undermine the security and economy of Uganda because if you don’t declare what you earn so that you pay your due share of the tax, clearly you are undermining our economy,” he said, adding:

“And the dispute between MTN and government, in particular, is that MTN is making transactions and declaring far less in both the volume and the income and consequently it is cheating government in tax revenue.”

President Museveni has also been disturbed by the continuous under-declaration and repatriation of funds after he got reports from investigations on foreign companies.

It is basing on this that he has moved to ban betting companies because, he says, they ship most of the money they make out of the country.

When he met the MTN Group Chief Executive Officer, Rob Shuter at the World Economic Forum in Davos, he (Museveni) urged him to float shares of the telecom company on the stock exchange so that Ugandans can be allowed to buy a stake in the company.

“Local ownership is important because it helps us stem capital flight which happens when the company is fully foreign-owned. The question of repatriating 100% of your profits yet there is little value-addition and wealth creation for Ugandans is unfair,” Museveni said.

“It for this reason that we are banning registration of new fully-owned foreign betting companies while the old ones will not have their licenses renewed. All they do is accumulate money from Ugandans then ship it out of the country,” he added.

Beating around the bush

One of the key accusations that have been lodged against MTN Uganda is that some elements in the company have been hired by the Rwandan government to spy on Uganda.

Though the government has not officially come out to speak out about it, some insiders in the security establishment have been quoted in the media talking about it.

Basing on this, Ssemujju Nganda, the Forum for Democratic Change spokesman, says that the government is not crystal-clearly passing on the message to the public who deserve answers.

“But when you deport it is a very strong, aggressive stance that government is taking. I think they are communicating the message that they’re not willing to share with the public,” he said, according to the NTV broadcast.

“I think these depositions just illustrate an interstate conflict and I hope the President and those who are commanding the army can be honest to tell the country.”

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Related:

Government: Deported MTN Uganda CEO betrayed us

Museveni, MTN CEO meet over employees’ transgressions in Uganda

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