Nzeyi Refuses to Cede Temangalo Land, Offers Refund

• Businessman Amos Nzeyi has refused to cede 55 acres of Temangalo land to NSSF, offering a refund instead, citing a discrepancy in acreage and the presence of his home on a disputed plot.
• The NSSF Temangalo housing project faces a critical stall as its only access road passes through land still owned by Nzeyi, raising concerns about project planning and approval.
• COSASE is investigating the NSSF Temangalo land transaction and housing project design, demanding explanations for unresolved access issues and questioning the small size of proposed housing units.
• In a separate inquiry, COSASE found that part of the security for a Shs20 billion NSSF loan to Uganda Clays Limited was also collateral for another loan from Housing Finance Bank.
• The parliamentary committee has directed NSSF, Uganda Clays, and project contractors to provide extensive documentation related to the land deal, loan security, and housing designs.

These incidents collectively emphasize the critical importance of verifying clear land boundaries, securing unequivocal access rights, and ensuring that collateral offered for loans is robust and unencumbered.

Businessman Amos Nzeyi has firmly rejected demands from the National Social Security Fund (NSSF) to surrender a contested 55-acre parcel of land in Temangalo. Instead, Mr. Nzeyi has offered to reimburse the NSSF for the funds it initially paid for the disputed property. This development unfolded during a recent appearance before the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), where Mr. Nzeyi was represented by his legal counsel, Peter Kabatsi. The committee, led by Muwada Nkunyingi, is currently investigating the Temangalo land transaction and the associated, now-stalled, housing project, following concerns raised in the Auditor General's report for the 2024/2025 financial year.

Mr. Kabatsi informed the parliamentary committee that the specific 55 acres being claimed by the NSSF are not recognized by his client as part of the original agreement, asserting that the actual acreage under contention is 45 acres. A significant point of dispute centers on Plot 12, which the NSSF claims is part of the land it purchased. However, this particular plot is where Mr. Nzeyi's personal residence and farm are located, making its surrender highly problematic for him. Mr. Nzeyi conveyed his willingness to refund the purchase price for the disputed land but reiterated his refusal to vacate his property. His lawyer further stipulated that if the NSSF insists on acquiring Plot 12, the Fund should then be prepared to purchase Mr. Nzeyi's entire remaining 110 acres in the vicinity at their current market valuation.

The investigation into the NSSF Temangalo housing project uncovered a critical oversight: the primary access road to the development site traverses land still owned by Mr. Nzeyi. This revelation immediately sparked alarm among Members of Parliament, who questioned the fundamental planning and approval processes for a housing project that lacks secured site access. The committee highlighted that this unresolved access issue poses a significant threat to the viability of the entire NSSF Temangalo housing project, raising concerns about how construction could proceed without clear entry points.

COSASE subsequently pressed NSSF officials for an explanation as to how the land transaction was finalized despite this glaring and unresolved access problem. Beyond the land access, the committee also scrutinized the contractors involved in the Temangalo project regarding the design and dimensions of the proposed housing units. Legislators voiced strong concerns that some of the rooms appeared to be inadequately sized to accommodate standard furniture comfortably. They demanded to know which authority had approved these designs, instructing the contractors to furnish the committee with copies of the approved architectural blueprints and Bills of Quantities for thorough review.

In a separate but equally concerning matter, COSASE extended its inquiry to officials from Uganda Clays Limited, focusing on a Shs20 billion loan that the company had secured from the NSSF. A major point of contention arose when MPs discovered that a portion of the collateral intended to secure this NSSF loan was concurrently being used as security for another existing loan obtained by Uganda Clays from Housing Finance Bank. This practice immediately raised serious questions about the integrity of the NSSF's lending procedures and the security of its members' funds.

The committee chairperson expressed grave concern over the situation, questioning how the same asset could legitimately serve as collateral for two distinct loans, thereby exposing NSSF members' savings to undue risk. In response to these findings, COSASE issued a directive requiring both NSSF and Uganda Clays officials to submit all relevant loan documentation and comprehensive security registers to the committee within a strict seven-day timeframe for further investigation.

The ongoing COSASE investigations, prompted by the Auditor General's report for the 2024/2025 financial year, underscore significant due diligence and compliance risks within Ugandan land transactions and public project financing. Both the Amos Nzeyi NSSF Temangalo land dispute and the Uganda Clays NSSF loan security issues highlight potential systemic vulnerabilities in how public funds are managed and invested. The committee's rigorous questioning of NSSF, Uganda Clays, and project contractors reflects a broader commitment to safeguarding the financial interests of NSSF members.

These incidents collectively emphasize the critical importance of verifying clear land boundaries, securing unequivocal access rights, and ensuring that collateral offered for loans is robust and unencumbered. The parliamentary committee is set to compile its comprehensive findings and recommendations for Parliament following the conclusion of its interactions with all involved parties. This process aims to address the identified shortcomings and prevent similar disputes and project stalls from jeopardizing future public investments.

This story highlights significant due diligence and compliance risks in Ugandan land transactions and public project financing. Lawyers should advise clients on the critical importance of verifying clear land boundaries, securing access rights, and ensuring robust, unencumbered collateral for loans to avoid similar disputes and project stalls.

Source: Original reporting via Nile Post