Uganda Airlines Faces Fraud Probe Over Fund Transfer – The Black Examiner

Summary:

• Uganda Airlines faces a financial loss after transferring funds to a fraudulent account, prompting an Interpol investigation. Despite improved revenue, concerns remain about profitability and contract terms. Regulatory hurdles delay new routes, but the airline expands its network.

Uganda Airlines, based in Entebbe, has brought a concerning issue to the attention of Interpol, following revelations from the Ugandan auditor-general. The state-owned carrier incurred a loss by transferring hundreds of thousands of US dollars to a bank account falsely attributed to the Democratic Republic of Congo’s civil aviation authority (Autorite de l’Aviation Civile de la RDC – AAC).

In his annual report to the Ugandan parliament on the financial year ending December 31, 2023, the auditor-general highlighted a significant concern. He stated, “UNACL [Uganda National Airlines Company Limited] paid a total of USD262,345.64 to a fraudulently created bank account purportedly to be in the name of the Civil Aviation Authority of DRC. This resulted in a financial loss to the company.”

Responding to inquiries, Uganda Airlines spokeswoman Shakila Rahim Lamar referred to a statement she provided to UGNEWS24. She explained that the airline received an emailed request to make payments to the AAC, which it promptly processed. However, a subsequent email with different account details for payment was received, which the airline declined, having already fulfilled the initial request. The matter, involving parties from different countries, has been forwarded to Interpol for investigation.

Interpol has been approached for verification of the information.

Meanwhile, the auditor-general’s report indicated that Uganda Airlines continued to underperform in 2023, reporting revenue of UGX230.4 billion shillings (USD60.5 million) compared to the budgeted UGX491.8 billion (USD129 million). Nevertheless, this represented an improvement of UGX89.4 billion (USD23.5 million) over the previous year’s revenue figure.

The auditor-general reiterated concerns about the airline’s operating margin ratio, indicating poor performance in terms of profitability and service sustainability. However, he deemed the budgeted state funding of UGX85.6 billion (USD22.5 million) for 2023 to be justified.

Additionally, he highlighted unfavorable contract terms between Uganda Airlines and Rolls-Royce, necessitating monthly advance payments for actual and un-flown hours. As of November 2023, Rolls-Royce Plc was demanding USD7.2 million.

The auditor-general also revealed that regulatory constraints had prevented Uganda Airlines from commencing new routes to Mumbai International, Lagos, Jeddah International, Guangzhou, and London Heathrow at the planned times. CEO Jenifer Bamuturaki disclosed that the airline had since obtained foreign operator permits for Jeddah, Lusaka, and Harare International, with a license for Guangzhou pending. Currently, Uganda Airlines serves 12 African destinations and two intercontinental routes, to Dubai International and Mumbai.

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