The National Social Security Fund (NSSF) Uganda has increased its shareholding in Umeme to 14.27percent after purchasing an additional 100 million shares at 34 billion Uganda Shillings. With this transaction, the value of shares NSSF owns in the power distributing company increases from 48 billion to 78.8 billion Uganda Shillings.
The fund previously held 8.1 percent in Umeme. With this transaction, the value of shares NSSF owns in the power distributing company increases from 48 billion to 78.8 billion Uganda Shillings. The increased stake will see dividends to the fund rise to 3.8 billion, up from the 1.97 billion Uganda Shillings earned in 2013.
In 2012 NSSF bought shares and the management was accused of not following the right procedures by not seeking approval from the Solicitor General, as the law requires. The Inspector General of Government Justice Irene Mulyagonja confirmed this last month after the conclusion of an investigation on NSSF.
Mulyagonja said the decision to invest in UMEME, though taken without the requisite advice from the Attorney General contrary to provisions of the Constitution, paid off for the fund and its beneficiaries.
However, she noted that the buying of these shares had been “in the interest of NSSF” and also pointed out that the transaction “was made in consultation with stakeholders.” The managers at NSSF have always defended the acquisition of Umeme shares as one that creates value for members, considering the dividend earned each year.
At the moment, the acquisition makes NSSF the third largest shareholder in Umeme. The shares were purchased last week as Actis sold a significant stake in the power company to various institutional investors.
NSSF has not yet commented on this story.