By Edris Kiggundu
WEEKLY OBSERVER State House has instructed the Inspector General of Police (IGP), Maj. Gen Kale Kayihura, to back off investigating property mogul Sudhir Ruparelia over alleged forgery and fraudulent dealings in two overseas companies. State House sources intimated to The Weekly Observer that police had nearly completed its investigations and was about to secure a warrant of arrest. State House intervention,
sources close to the matter say, came after the panicky tycoon contacted State House and Kayihura reportedly from abroad, fearing that he would be arrested upon return. It was after this telephone call and orders from above that Kayihura instructed Criminal Investigation Department (CID) and the Public Relations Office to issue a statement denying that Interpol was investigating Sudhir. ![]() | | Sudhir Rupareria | ![]() | | Maj. Gen. Kale Kayihura | The Weekly Observer has learnt that before Sudhir traveled
abroad, police searched his premises and he made a statement to CID attached URA headquarters. Source close to CID said that police unearthed a lot and it would take the high-level intervention to save him from prosecution.
"The man is finished. He can only be saved by someone higher. Even himself, he knows it; that is why he is now panicking", a source said.
The police investigations team is headed by detective superintendent of police John Ndugutse. Early this week the police spokesman Patrick Onyango said police was not investigating Sudhir because "he has no offence."
Kayihura is alleged to have told his juniors to back off the mogul because he was an investor who had entered a deal with government to construct 60 presidential suites for the Commonwealth meeting (CHOGM) due in 2007. Kayihura has instructions to stay the investigations and likely arrest until CHOGM is ended. Kayihura's swift reaction, sources say, was
intended to calm the tycoon who recently signed a $30 million hotel venture with government.
Sudhir has since returned but he is keeping a low profile.
Under the agreement, government shall own 25% shares in the 60 presidential-suite hotel to be constructed by the tycoon at Munyonyo.
Kayihura is alleged to have contacted some media houses to cut down on publishing stories about Sudhir, although he denied it. 'Interpol probe okay' When contacted, Kayihura denied being instructed to foil the investigation. On the contrary, the Police Chief told The Weekly Observer this week that Interpol was free to work with URA and investigate the matter. "In any case," he said, "three CID officers are attached to the tax body and their work is to help URA investigate disputes of such nature." He also insisted that URA is an autonomous body and does not have to consult the police "all the time"
Asked
why police was quick to issue a statement distancing itself from the Interpol investigation, Kayihura said this had been done to correct the 'wrong impression' created by The New Vision. He did not elaborate what "wrong impression" the story had created but instead labeled those dragging the president's name into this saga 'evil'. Sudhir vs URA Sudhir's woes with URA started last month when the tax body demanded Shs 36bn as tax arrears allegedly accumulated by one of his companies, Meera Investments Limited (MIL). Sudhir, in response sued the body, claiming MIL had been given tax incentives by Uganda Investment Authority (UIA). He wanted Shs 36bn as damages. An examination of correspondences between Sudhir, UIA and URA to this effect reveals that the tycoon was on 25, May, 2005 issued a certificate of tax incentives which was valid up to December, 2000.
It was not clear
whether this tax incentive was comprehensive- and covered taxes such as corporation tax, tax on dividends and other taxes. Using this loophole, URA with the approval of UIA insisted MIL should pay 801, 853, 367 corporation tax. Sudhir then filed a civil suit in the High Court on February 23, 2000 against UIA for reneging on the contract. He wanted court to among others declare that MIL was not liable to pay since the tax incentive covered this as well.
Prompted by this action, UIA, on the same day, hurriedly convened a board meeting which confirmed that MIL was exempted from paying corporation tax. This decision was communicated to URA by Dr. Maggie Kigozi, UIA Executive Director, five days later through the Commissioner for Tax Policy in the ministry of Finance, Planning & Economic Development.
UIA wrote another letter on February 28, 2000, informing the Solicitor General that the tax dispute, the basis of the suit, had been
resolved.
But the matter resurrected last year when URA Commissioner General Allen Kagina wrote to UIA on June 29, seeking further clarifications on the matter. UIA replied three weeks later stating that under the incentive, "MIL was granted 100% exemption from corporation tax, tax on dividends and withholding tax until December 2000.
Seemingly unconvinced by all this explanation, URA went ahead last month to press for tax arrears from MIL which they say now total up to Shs 36bn. The case took a new dimension last week following revelations that URA had engaged Interpol to investigate circumstances under which Sudhir obtained loans from two overseas companies. The companies in question are Anglo Universal Holdings of British Virgin Islands and Goldstar International of Gibraltar.
When contacted , URA was tight lipped over the investigation.
"I cannot discuss the matter because it is before court," said Patrick Mukiibi, the
URA assistant commissioner for Public and Corporate Affairs. Interventions not new While this intervention is likely to raise many questions, it's one of the various examples where the higher authorities have intervened on the side of property moguls. Last week President Museveni okayed a deal which again involves Sudhir constructing a shopping mall at the present headquarters of the CMI along Kitante Road. Before that, he ordered the Shimoni and UTV land, at Nakasero to be allocated to investors to construct hotels for CHOGM.
Spectacularly, in 2004 he instructed Bank of Uganda to bail out another fledging tycoon Hassan Basajjabala with Shs 20bn. Museveni has faced criticism for this mode of operation which is selective and many times never follows the due procedures. | 
