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Uganda Property Holdings Limited (UPHL), the government company entrusted with managing a multi-billion-shilling property empire stretching from Uganda to Kenya and London, has been caught in a web of financial and operational failures after the Auditor General uncovered a string of glaring weaknesses that have left billions of shillings hanging in uncertainty, prime government assets underutilized and strategic targets abandoned.The explosive findings contained in the Auditor General’s report for the financial year ending December 2025 paint a disturbing picture of a company sitting on some of government’s most valuable real estate assets while struggling with tax disputes, doubtful debts, declining revenues and missed opportunities that continue to erode its earning potential.The report heaps pressure on the company’s leadership headed by Managing Director Wilbert Mugume, who has been at the helm since August 2019 and is currently serving his second and final term. Sources indicate that an intense succession battle has already erupted within the company over who should replace him, while reports suggest Mugume has been lobbying for an extension despite claims that influential decision-makers are reportedly unhappy with the company’s performance.The Auditor General first questioned an unresolved income tax assessment amounting to a staggering UGX2.19 billion arising from a tax audit. According to the audit findings, although the Uganda Revenue Authority acknowledged that UPHL had foreign tax credits worth UGX2.44 billion, these credits were never applied to offset the assessment. The company reportedly wrote repeatedly to URA seeking correction of the records, but the tax ledger has never been updated to reflect the available credits.The consequence is that the company continues carrying what the Auditor General describes as an overstated tax liability running into billions of shillings, raising concerns about the accuracy of its financial position and the speed at which management resolved one of its most significant tax matters.As if the tax headache was not enough, the auditors also uncovered another financial time bomb involving UGX4.048 billion owed to UPHL by Unifreight Cargo. The debt has now been classified as doubtful and is considered unlikely to ever be recovered.The report indicates that management is still waiting for guidance from the Attorney General on whether the debt should finally be written off, meaning more than UGX4 billion remains trapped in uncertainty while the company’s books continue carrying receivables whose recovery is increasingly doubtful.The Auditor General warns that the prolonged uncertainty materially affects the accuracy of the company’s receivables and points to weaknesses in UPHL’s credit management systems.Perhaps the most shocking revelation in the report concerns UPHL’s handling of some of Uganda’s most valuable government-owned properties in Kenya.Physical inspection carried out by the Auditor General established that UPHL owns three large properties in Nyali, one of Kenya’s most prestigious and commercially attractive locations. Together, the properties cover approximately four acres of prime land with enormous commercial development potential.Instead of generating premium returns expected from such strategic assets, the audit found the properties occupied by small-scale tenants paying relatively low rent, denying government millions in potential income.The Auditor General observed that these valuable properties are grossly underutilized despite their location in one of East Africa’s prime real estate markets.According to the audit, proposals had already been prepared for construction of maisonettes and flats capable of generating substantially higher rental income. These plans were reportedly discussed with shareholders but never took off because of cash flow constraints.As a result, some of government’s most valuable foreign assets continue earning only a fraction of what they could potentially generate if properly developed.The Auditor General concludes that the continued underdevelopment of the Nyali properties significantly reduces the company’s earning capacity, weakens its long-term financial sustainability and delays opportunities for expanding its investment portfolio.The watchdog has now advised UPHL management to work together with shareholders to mobilize investment resources and immediately fast-track development of the properties in order to maximize utilization and increase revenue generation.The audit also reveals that despite facing only a modest funding gap of 12 percent, UPHL still failed to implement nearly half of the interventions contained in its own strategic plan.Out of 27 planned interventions, management managed to implement only 16.This means eleven strategic interventions remained unfinished despite the relatively small financing gap, raising fresh questions about planning, execution and institutional effectiveness.The report further reveals that UPHL’s financial performance deteriorated sharply during the review period as the company slipped deeper into losses.According to the Auditor General, Uganda Property Holdings Limited registered increased losses after suffering declining revenue and increased income tax obligations.The company’s operating margin dropped dramatically from 15.5 percent to only 5.4 percent, representing a decline of ten percentage points.The report attributes this worrying performance mainly to the World Food Programme downsizing its operations in Uganda and vacating rented warehouses previously owned by UPHL.As WFP was the company’s single biggest client, its departure significantly reduced rental income and exposed how vulnerable the company had become to dependence on one major tenant.Combined with increased tax obligations, the loss of the major client pushed the company further into financial distress.The findings are particularly alarming considering the enormous asset base under UPHL’s control.The government-owned company manages a multi-billion-shilling real estate portfolio on behalf of Uganda under the supervision of the Ministry of Finance.Its property portfolio spans Uganda, Kenya and even the United Kingdom, with assets located in Kampala, Jinja, Tororo, Mombasa and London.Within Uganda, UPHL controls strategic industrial, residential and commercial properties, including the Bugolobi factory complex on Spring Road, warehouses in Tororo designed to support regional trade and industrialization, and numerous land holdings across Greater Kampala, Nalukolongo, Gayaza and Namulonge.Overall, the company manages 29 government properties comprising 12 industrial properties, nine residential properties, seven commercial properties and one land holding.Its Kenyan portfolio is even more impressive.UPHL manages Uganda’s extensive property investments in Mombasa, including 11 warehouses, one carport, two office blocks, three commercial blocks, four residential houses and two yards.Government records show these Kenyan properties were valued at approximately Shs244 billion following the most recent valuation, highlighting the enormous responsibility placed upon the company’s management.UPHL itself was incorporated on November 3, 1998 after government transferred 23 former state-owned properties into the company.At the time of incorporation, those properties were valued at just Shs13.93 billion.According to historical reports submitted to Parliament by the Ministry of Finance, government later invested an estimated Shs18.7 billion in maintenance and refurbishment to restore many of the assets, which had fallen into dilapidation after the collapse of their former parent companies.Those investments were intended to transform the properties into competitive income-generating assets capable of delivering sustainable returns to government.However, the Auditor General’s latest findings now raise uncomfortable questions about whether that objective is being fully achieved.With billions locked in unresolved tax disputes, billions more sitting in doubtful debts, prime Kenyan land lying underdeveloped, strategic targets abandoned and revenues falling following the loss of a major tenant, the audit paints the picture of a government property giant struggling to unlock the full value of assets worth hundreds of billions of shillings.The report is expected to intensify scrutiny of UPHL’s leadership and governance at a time when the company’s top office is approaching a leadership transition. With Wilbert Mugume serving his final term as Managing Director amid reports of internal succession battles and alleged lobbying for an extension, the Auditor General’s findings are likely to fuel even greater debate over whether fresh leadership is needed to restore confidence, improve asset utilization and ensure Uganda’s vast government property portfolio delivers the value taxpayers expect.GOT A HOT STORY? LET US KNOW!Got breaking news, explosive secrets, or hard evidence?Email us: redpeppertips@gmail.comWe accept tips, documents, videos, photos, and recordings—the more evidence you have, the better.CONFIDENTIALITY IS OUR TOP PRIORITY. SOURCES ARE ALWAYS PROTECTED!About Post Author
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