The Attorney General Kiryowa Kiwanuka says the 10-year contract government of Uganda signed with Russian company Joint Stock Company Global Security to install digital monitoring systems in all motorcycles and vehicles in Uganda was approved by his office.
Joint Stock Company Global Security which was awarded the contract on Friday last week is facing bankruptcy litigations in Russia and more than a dozen other debt related litigations, however Kiryowa told URN in a phone interview that the government isn’t aware of any bankruptcy order issued against the company.
“Yes, the contract was brought to my office, we approved it and we believe there is no risk, Uganda is not exposed to anything at all,” he said. “Contract was approved by my office taking into consideration all the laws of this country and we are certain that we don’t have any order of bankruptcy issued against the company.”
That Global Security is facing bankruptcy litigation in Russia is public information. URN obtained data about the company from Honest Business website, which curates information about businesses and companies in Russia.
URN published the status of the company on Sunday. On Monday several MPs expressed surprise that the government could enter a contract with a company that is facing bankruptcy litigation. They also queried the process through which the contract was awarded, whether it was open and if PPDA was involved.
Joint Stock Company Global Security was sued by LLC “Rus Prom-Technologies”, another Russian company that wants it declared bankrupt. The case was filed in the Arbitration Court of the City of Moscow on September 17th 2020 and accepted on October 20th 2020. Though the case was accepted for hearing, the hearing sessions have been postponed several times as Global Security fights to pay the debt it owes Rus-Prom-Technology.
In another case filed in March 2019, Rus-Prom-Technology had sued Global Security for failure to pay 16.6 million rubles (Russia currency) – about $220,000 – and Rus-Prom-Technology won the case.
Global Security is facing other debt litigations in Russia. Stok-Trading LLC sued it for a debt of 1.2 million rubles which is about $16,260, Jsc Royal Silk Factory sued the company for a debt of 19.9 million rubles ($270,000), Turday GS sro Slovak Republic sued the company for a debt of 6.1 million rubles ($82,655), JSC ZVI sued the company thrice; first for a debt of 23 million rubles (about $300,000) then a debt of 10 million rubles (about $135,500) and finally for 4.6 million rubles (about $62,330).
Global Security has also been sued by Limited Liability Partnership “Orken Alem” for a debt of 8.5 million rubles (about $ 115,175) and Gu Main Department of the Pension Fund of the Russian Federation for failure to pay 10,000 rubles (about $135) and 455,00 rubles (about $600). All these cases were filed between 2019 and July 2021.
But Samantha Mwesigye, a procurement lawyer and lecturer at Law Development Center, Makerere argues that Public Procurement and Disposal of Public Assets Authority regulations don’t allow Procuring and Disposal Entities (PDEs) to enter contracts with banks, companies or those facing bankruptcy.
Thus, the contract with the company that appears to be a serial debtor could be void.
“PPDA standard bidding document indicate that the parties to a contract should not be bankrupt (technical requirements),” Mwesigye told URN yesterday. “This however is purely a contractual issue and a company facing bankruptcy does not have the capacity to do business.”