HomeBUSINESSMbale: Cooperative Members connive with fraudulent law firms to swindle money 

Mbale: Cooperative Members connive with fraudulent law firms to swindle money 

By Muhumuza Jimmy 

A Parliament Committee investigating war loss compensation funds paid to cooperatives has unearthed political interference in the societies in Mbale and Bulambuli districts.

MPs on the Committee on Tourism, Trade and Industry on Tuesday, 5 September 2023 interacted with six cooperatives in the two districts and discovered that the majority of them were lured into contracts with law firms that eventually cheated them, taking up the bigger percentage of the money.

Parliament asked the Committee chaired by Hon. Mwine Mpaka to establish whether money was released to the right cooperatives; and whether cooperatives put money received to the right use.

Fred Masaba, Chairperson of Buyaka Gowers Cooperative, narrated their ordeal dealing with a law firm identified as ‘Probata’, which he said was recommended to them by officials in the Ministry of Tourism, Trade, and Industry.

“As a cooperative we solicited our own lawyer but she was rejected by the ministry official who manned the compensation process. He told us he can get us one who was well accustomed with the compensation process,” said Masaba.

Masaba said the lawyer and the ministry official have been inaccessible as their phones have been switched off since March 2023. By then, he said the law firm had only remitted to the cooperative about 3 percent of the total amount released by the Trade Ministry.

Any attempt to reach the ministry’s Permanent Secretary to claim the balance, Masaba said was blocked by some ministry officials.

“Having been cheated by the first law firm, we went to see the permanent secretary to clarify how the compensation process runs, before we could give a contract to ‘Probata’ but the official in charge blocked us,” Masaba said.

Similar experiences were registered in the Jinja district, where some cooperatives claimed to have been ill-advised by key officials in the Trade Ministry, to utilize law firms on the premise that they would run the compensation application process quickly.

The committee further learned that in some cooperatives, law firms could not willingly divulge the right amount released by the Trade Ministry and if they did it was months after the release.

“Even when the ministry releases money to the lawyer we are not informed, we have to chase him in Kampala, and at times we have had to follow him in South Africa,” said Joseph Mulumba, the treasurer of Masaba Cooperative Union. 

MPs observed connivance by some of the cooperative members with the fraudulent law firms, tasking them to explain why they never reported such manipulation to the authorities.

“Have you ever reported the case to the Police, the RDC, the District Chief Administrative Officer or sat with your district commercial officer? If you know money went missing have you terminated the lawyer’s contract?” asked Hon. Mwine Mpaka.

Busujju County MP, David Kalwanga noted that even the terms of engaging the lawyers provided loopholes for fraud as some cooperatives offered the firms as high as 40 percent of the total compensation funds.

“What were you members of Masaba Cooperative Society up to, coming up with a provision to pay the lawyer 10 percent of the money and any other expenses? Any other expenses could amount to 90 percent, that is a loophole for cheating,” said Hon. Kalwanga.

The Cooperative Societies that the committee interacted with include North Bukedi Cooperative Society, Masaaba Cooperative Union Ltd., Lambuli Central Pulpery Cooperative Union, Buyaka Growers Cooperative Union, Bugisu Cooperative Union, Bumwambu Cooperative Society Ltd. 

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