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Law Society Backs Rukutana on UTL Crisis as Anite Puts up Resistance

The Uganda Law Society (ULS) has weighed in on the unraveling saga at Uganda Telecom Limited (UTL), criticizing State Minister for Privatization and Investment, Hon. Evelyn Anite for what they say was overstepping her powers in trying to push out the company’s appointed administrator.

The association, which unites all lawyers in Uganda, says Minister Anite under the current laws has no say on the operations of a company that has been placed under administration.

The lawyers also argue that Anite’s attempt at forcing Deputy Attorney Hon Mwesigwa Rukutana to  to apply in Court for the removal for the administrator, was beyond her paygrade.

Hon Anite accuses  the current UTL Administrator Mr Bemanya Twebaze of among others hijacking the government (partly) owned telecom, and blocking any form of audit since he took over administration in 2017.

Anite said in a letter to Rukutana that she was informed during a meeting at Finance Ministry attended by Treasury Secretary Keith Muhakanizi that Bemanya was a “crooked lawyer”.

On the other hand, Mr Bemanya, who is also the Registrar General of Uganda Registration Services Bureau (URSB) claims he has been making periodic reports about the company’s financials, as required by law, to the High Court and not the ministry.

But Anite said in a letter to President Museveni on Saturday that “whereas Mr. Bemanya availed progress reports on the Administration, he has not availed us with an update for over 8 months, and today, I do not know what is happening in the Company.”

Ultimately, earlier this week, Minister Anite directed the Deputy Attorney General, Hon Mwesigwa Rukutana to apply to High Court to have Bemanya removed from administration of UTL.

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Yesterday, Rukutana wrote back, expressing legal concerns about the minister’s directive.

The minister however, responded furiously, castigating the Deputy AG, for misreading her directive as a request.

Law Society speaks out 

In statement on Saturday, the Uganda Law Society condemned the pointed exchange between the two government officials, terming it as lack of decorum.

“We consider it our right to demand  that persons  holding public  offices  conduct public affairs (and themselves) with the expected level of decorum and in a manner that does not erode the confidence of the public in those offices,” wrote ULS President Simon Peter Kinobe.

The Law Society then proceeded to criticize minister Anite for overstepping her roles as the custodian of the stake that government has in UTL.

According to the lawyers, under the Insolvency Act of 2011, Hon Anite as a shareholder has no say on the operations of UTL now that it is under administration.

“The implication of the appointment of an Administrator is that the company’s shareholders and management are divested from the company and the full authority of running  the  affairs  of  the  company  is  vested  in  the Administrator  with  a view to salvaging the  company  from  insolvency/liquidation  as  a  going  concern,” explained Kinobe.

“Once a company embraces insolvency  proceedings,  be  it  liquidation,  receivership  or administration,  the  shareholders  cannot  supervise (or  purport  to  supervise) the  office holder   (liquidator,   receiver   or   administrator).   The   interests   of   creditors (which, hypothetically, were not taken care of  by  the  company  directors  and  shareholders)  in such situations take precedence over the interests of shareholders.”

“Therefore, the Hon. Minister of Finance as a shareholder cannot, therefore, be held out as the supervisor of the administrator of “his” insolvent company.”

Anite’s view

On her part, Anite explained that whereas Government has “not attempted to control the work of the Administrator as suggested by the Deputy Attorney General, it is true that the Administrator’s appointment was endorsed by ourselves as the only shareholders available to lawfully sign shareholders’ resolution, which further explains why the Administrator is required under the Insolvency Act and Regulations to obtain the consent of the Company. The Hon. Minister of Finance has issued those consents without any reservations in order to facilitate the ongoing process of Administration.”

Anite further said the “success of the Administration cannot be guaranteed without the support of Government which is the lone shareholder authorized to lawfully sign resolutions on behalf of the Company.”

Since Bemanya claims that periodic reports have been shared with Court and all creditors every 6months as required by law, ULS advised the minister to go to court and seek these reports because they are essentially public documents.

The lawyers also criticized Minister Anite for attacking Deputy AG who is not her junior.

“Under our laws, no Minister has the mandate or power to “order” the Attorney General to undertake any action,” stressed Kinobe.

“The Attorney General, in his capacity as the principal legal advisor of the Government, may deem any act inappropriate or out rightly illegal.

“ULS would like to implore  the good Honourable Minister to refrain from seeking to undermine the authority of that office.”

Anite said in her letter to Museveni that the suggestion by Rukutana Government’s request to the Administrator to comply with the law amounts to interference with Administration is misconceived and does not amount to interference.

”In fact what may be construed as interference as suggested may be used by those he has cited to unfairly accuse Government. There is no basis for this assertion and the Deputy General is arming potential plaintiffs to sue Government without cause, and yet his office should know better since he is constitutionally obliged to defend the Government,” said Anite.

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