Kampala, January 2025 — The Auditor General’s report for the financial year ending 2024 has flagged the Government of Uganda’s irregular acquisition of 150,000 redeemable preference shares in Roko Construction Company, revealing that the allotment and purchase were completed before receiving the required approval from Parliament.

The report highlights significant violations of both the Public Finance Management Act Cap 171 and the Companies Act Cap 106, warning that the transaction could expose the government to legal risks and undermine financial accountability.
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According to the Auditor General, Edward Akol, the share purchase was finalized on October 22, 2021, with the issuance of a share certificate for the 150,000 preference shares valued at Shs 1,000,000 each and issued at a premium of Shs 380,367 per share.
However, this transaction was executed before Parliament’s approval, contrary to Section 22(1) of the Public Finance Management Act, which mandates that government financial commitments exceeding one financial year must first be authorized by Parliament.

On October 8, 2021, Roko Construction Company resolved to create 150,000 preference shares at a premium value, which was later formalized in a resolution on October 22, 2021.
These resolutions were filed with the Uganda Registration Services Bureau (URSB) in July 2022, long after the transaction had been executed.
On October 22, 2021, the company allotted the 150,000 shares to the Ministry of Finance, Planning, and Economic Development for a total transaction value of UGX 207.13 billion.
The government’s acquisition of these shares was completed despite the absence of legislative approval, violating procedural safeguards designed to ensure accountability.
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Legal and Procedural Gaps
The Auditor General underscored that the failure to seek parliamentary authorization before binding the government to this financial commitment undermines established controls and creates potential for legal disputes.
“By allotting and purchasing shares prior to parliamentary approval, the responsible entities disregarded statutory requirements, exposing the government to financial and legal risks,” the report noted.
The lack of clear guidelines governing government investments and bailouts was cited as a contributing factor to this irregularity.
The Auditor General further observed that no management responses were provided to address these findings.
To address the irregularities, the Auditor General recommended that the Permanent Secretary/Secretary to the Treasury (PS/ST) should urgently review the share acquisition process to mitigate any legal risks that may arise.
Akol also suggested that Government entities must strictly adhere to legal requirements for financial commitments, especially for transactions involving public funds.
The Government should establish clear policies and procedures governing bailouts and investments to prevent similar irregularities in the future, Akol further advised.
The irregular purchase of shares in Roko Construction Company has sparked questions about the transparency and accountability of government investments.
With public funds at stake, Parliament and other stakeholders are likely to demand a comprehensive review of the transaction to ensure compliance with the law and prevent future occurrences.