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9mobile: Uganda expels Isa Funtua, son as fraudsters

Teleology Holdings Nigeria Limited, which recently acquired Etisalat, now 9Mobile, under shady circumstances, a front for dubious Nigerian forex round-tripper, Mallam Isa Funtua, and his son, Abubakar, took their shady deals to Uganda where they were not only chased out but described as “fraudsters”.

After the acquisition of Etisalat (9Mobile), Teleology bought Ugandan state-owned telecommunications company, Ugandan Telecommunications Limited, UTL, for $71 million.

However, the deal hit the rocks after certain Ugandan government officials raised the alarm that Teleology was run by a “mafiasco-like syndicate of fraudsters”. They were not far from the truth.

To launder millions of United States dollars made from scandalous forex and other shady deals in Nigeria, the Funtuas found in Asega Aliga, a 1996 Ugandan law graduate of the University of Dar es Salaam, the perfect front.

Fronting for the Funtuas wasn’t a challenge for Aliga, who headed several financial institutions across Africa and the Middle East, including Barclays Wealth, UBA Capital, and PHB Capital.

The Ugandan front is in his early 40s.

Abubakar, son of Ismaila Isa Funtua
Abubakar, son of Ismaila Isa Funtua

After hurriedly setting up Teleology Holdings, Aliga rushed back to his native Uganda a few months after acquiring Etisalat (9Mobile).

In 2017, Uganda’s UTL was put under receivership. He indicated Teleology Holdings’ interest to buy UTL.

Back in Nigeria, the Funtuas were pulling the strings, using their relationship with President Muhammadu Buhari Presidency to pressure President Yoweri Museveni of Uganda to back the rogue company’s (Teleology Holdings) win the bid.

Sources in Kampala disclosed that, despite the obvious deficiencies of Teleology Holding’s bid, in October 2018, to please President Buhari, President Museveni caved in.

Teleology was announced the winner of the bid to take over UTL.

Teleology’s $60 million bid defeated Mauritius Telecom, which bid $45 million and other bidders such as Afrinet Communications, Hamilton Telecom, and Safaricom.

According to a report of the Financial Intelligence Authority (FIA), the Ugandan government agency vested with the powers to investigate contracts and prevent money laundering, out of the six shortlisted companies; only one of the six companies -Mauritius Telecom- was the best firm in spite of offering the lowest assets of $45m.

The FIA report was signed by its Executive Director, Sydney Asubo, and dated May 25, 2018,

“We have not received any adverse information related to non-compliance with any regulatory requirements.

“In addition, the Financial Intelligence Authority has not received any reports on this company [Mauritius Telecom] indicating possible involvement in money laundering or terrorist financing,” noted the report.

The bid won by Teleology was subject to the payment of a nonrefundable fee of $7.1 million within 60 days.

Sources in Uganda and Nigeria said that while Museveni was under pressure from top officials in the Nigerian presidency, he was dealing with heavy resistance from cabinet members who were angry he awarded the UTL bid to a Nigerian firm with no experience in the telecom business.

To stave off a possible political backlash in his cabinet, a source in Uganda said Museveni had to put a caveat in the bid won by Teleology, asking the company to pay $7.1 million within 60 days to guarantee the bid.

However, while Teleology Holdings failed to pay the required $60 million to finally take over the Ugandan State-owned Telco, a report carried out by the Ugandan Government’s Financial Intelligence Authority, FIA, described Teleology as “a company with no clear source of funding and ownership.”

Sources disclosed that once Teleology got wind of the report, they stopped the payment of $60 million bid price and allowed the time given them to elapse. UTL returned back to the market in search of investors.

On April 17, 2019, Ugandan State Minister for Investment Evelyn Anite said they realized that the deal was given to fraudsters and the search for genuine investors was on.

Minister Anite who described Teleology Holdings as “fraudsters”, said it was based on a report which linked the company to the Funtuas who are notorious for Forex scam, and using Aliga, a Ugandan, as a front.

“What happens with UTL? Like you know Kisanja Hakuna Mchezo (term for serious business), and you know Anite.

“I told them these are quack investors and it has come to the fore that they are quack investors.

“We’re back on the drawing board to get a proper investor,” noted the minister.

“One thing I can promise you and promise my president is that; we shall not betray our country to get quack investors or surrender our resources to fake people. That we’ll not do”, added the minister.

“Although Teleology Holdings Limited submitted the highest bid, it was revealed by the FIA that they had no proper record of books of accounts, had no money to Invest, no experience in the telecom business and it was only a Special Purpose Vehicle created with a sole aim of acquiring shares in Uganda Telecom.

“Indeed, my fears were vindicated because up to the present, this shell company has never brought a coin to invest in UTL,” she declared.

“In Uganda, Aliga is known within government circles as a man with questionable character who fronts for corrupt Nigerian politicians. His source of wealth is unknown to Ugandans.

“We really don’t know how he made his money.

“We just know that he is close to some top Nigerians in government circle who are into all kinds of shady deals,” a Ugandan journalist who wants to remain anonymous said.

Worried by the untold embarrassment, President Museveni commissioned a probe of Teleology.

Noted the report: Teleology Holdings Ltd. Is Gibraltar registered private equity with 12 international and 8 Nigerian shareholders.

The key promoter of Teleology Holdings Ltd. is Mr. Adrian Wood, a former chief executive of MTN Nigeria.

There are media reports indicating that prominent Nigerian politicians and businessmen are behind the company.

“It is reported that Teleology Holdings Ltd. is in the process of acquiring 9Mobile, formerly Etisalat Nigeria, one of the major telecommunication companies in Nigeria, which got into financial problems leading to failure to repay a USD 1.2bn syndicated loan obtained from 13 banks.

It is further reported that Teleology Holdings Ltd. executed a loan purchase agreement to take over the loans and that they have so far paid USD 50m of the USD 500m bid,” the report said.

“We have also established that Teleology Holdings Ltd. owns 50% of the shares of Teleology Uganda Ltd. which was incorporated in Uganda on April 17, 2018, as a company limited by shares.

“The other shareholders are DMA Technical Services Ltd. (44%) and K-Tech Consult (U) Ltd. (6%).

“DMA Technical services were incorporated on September 9, 2016, with Abdul Jingo (20%) and Agele Ismail Aliga (80%) as the shareholders.

“Their main business is indicated as construction, engineering, and general consulting.

“K-Tech Consult (U) Ltd. was incorporated on August 14, 2007 with Luwum Adoch and Tayebwa Nicholas each holding 50% of the company’s shares.

“Its main business is indicated to include the provision of public telecommunication services and products including fixed and mobile telephone services, sale and distribution of international telephone calling cards, and local international airtime cards.

Financial Analysis of 9mobile

There are no records of Teleology Holdings Ltd’s previous business operations and financial records. In addition, the company’s funding sources are not clear.

There are reports that Teleology Holdings Ltd. submitted its bid to acquire 9mobile with the intention of using 9mobile’s assets to source for funding from financial institutions.

However, this may prove to be difficult given that 9mobile previously defaulted on a USD 1.2bn debt.

In addition, this borrowing may be indicative of Teleology Holdings Ltd’s lack of financial strength.

“Given the unclear ownership structure, unknown sources of funding and the fact that the company is yet to complete payment of the USD 450m in the proposed acquisition of 9mobile in Nigeria, Teleology Holdings Ltd’s financial standing is uncertain”, the report concluded.

In addition, Teleology Uganda Ltd is a newly formed company with no record of financial transactions.

A review of the respective bank accounts of DMA Technical Services Ltd. and K-Tech Consult (U) Ltd revealed that both companies have not had any significant transactions.

However, the financial Intelligence Authority has not received any adverse reports on Teleology Holdings Ltd., Teleology Uganda Ltd ., DMA Technical Services Ltd, K-Tech Consult (U) Ltd or Mr. Adrian Wood indicating possible involvement in money laundering or terrorist financing.

Conclusion

In light of the above, it is clear that Teleology Holdings Ltd is a special purpose vehicle with no known previous operations as a business, unclear shareholding and funding sources.

Moreover, the company is in the process of another acquisition.

It is therefore our considered view that it would be risky for the Government of Uganda to partner with this company, and thus would not be an ideal partner.

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