ISO bosses jailed over embezzling sh4.9b

Three former employees of the Internal Security Organisation(ISO) have been jailed for embezzling sh4.9b meant for paying 1,078 retirees of the organisation. Jeff Lawrence Kiwanuka, Jamal Kitandwe and Bernard Kamugisha were convicted on Monday after they were found guilty of embezzling the money.

In his verdict, Justice Lawrence Gidudu said prosecution proved beyond reasonable doubt that the trio with intent to defraud, formed a company called Uganda Veteran Internal Security Organisation (UVETISO), which they used to embezzle the money meant for the claimants.

“This company was used as vehicle to access money from the Government. The accused persons were the signatories to the account and bank documents show that they signed for the money,” Gidudu said.

He further said the accused were given an opportunity to explain how the money was spent, but they failed to give a convincing explanation to court. In their defence, they stated that the complaints should have been filed against UVETISO not them since the money was paid to UVETISO.

However, court dismissed their argument on the grounds that as directors who formed the company they should be held accountable for their actions. The court will sentence them tomorrow. Gidudu said one cannot hide behind the Company Act as it requires court to establish the people in charge of the company.

“The High Court may, where a company or its directors are involved in acts including tax evasion, fraud or where, save for a single member company, the membership of a company falls below the statutory minimum,lift the corporate veil,” he said.

Prosecution contends that out of 1,078 claimants, only 117 were paid terminal benefits. Benefits meant for 961 claimants was never accounted for.


The facts leading to the charge of embezzlement stipulate that between 1993 to 1995, 1,078 former employees of ISO were retired from the service and were paid some money. However, having been dissatisfied with the payment, they filed a suit against the Government.

Court ruled in their favour and ordered the Government to pay them their terminal benefits, as well as damages of sh500,000 for each claimant. This prompted the Attorney General to enter negotiations with them and agreed to pay a compensation of sh39.1b to them.

The Government, through the Matovu & Matovu Advocates,signed a memorandum of understanding on behalf of the claimants to pay sh10b. The balance of sh29.1b would be paid in two installments during financial years 2015/2016 and 2017/2018.

The first installment was paid through defunct Crane Bank account number 0145034204600 in the name of Uganda Veteran Internal Security Organisation. Prosecution led by Josephine Namatovu, a principal state attorney from the Office of the Director of Public Prosecutions, said before the money was paid, the accused persons called all the former employees for a meeting at National Threatre in Kampala.

The accused asked each of the claimants to buy forms at sh1,000 and filled in their details. The accused said the terminal benefits would be paid from the Treasury into their respective bank accounts. Having provided their details to the trio, prosecution said the beneficiaries waited in vain for their payments, only to learn later that sh10b had been paid to a few individuals.

“Despite several promises by the accused persons, the complainants never received any payment through their accounts,” Namatovu said.

After the beneficiaries established that the accused had received sh10b as their part payment, they confronted the accused. The trio claimed that part of the money amounting to sh5.1b had been paid to some beneficiaries and that part of sh4.9b cleared legal fees.

Prosecution alleges that the accused refused to provide the list of claimants who they said had received part of the money. Failure to get their benefits prompted them to report the matter to Inspectorate of Government.

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Lukwago Joseph grew up in a newspaper family, and rumor has it that instead of playing the guitar in his infancy, his parents put a reporter’s notebook and a pen next to him shortly after he turned born eight years. Before becoming editor of UGANDANZ, Lukwago was a parliament news editor for WBS TV. He joined UGANDANZ in July 2018, A few months after the company launched. Lukwago also spent five years as a freelance reporter, where he covered reporting for the highest bidder, intelligence, foreign policy, and Ugandan police. Lukwago graduated from Makerere University in 2008 with a B.A. in Journalism and worked on his college newspaper.