The Attorney General, Mwesigwa Rukutana, has said Umeme’s decision to reject Mr Pius Bigirimana’s nomination as a board member was “flawed”, “unfair” and “illegal”, Chimp Corps report.
Rukutana also ordered that a new Annual General Meeting (AGM) be held to ratify Bigirimana’s nomination.
The AG’s legal opinion could see Bigirimana’s appointment to the board of the largest electricity distributor reconsidered.
Bigirimana was on April 15, 2018 nominated as non-Executive Director to the Umeme Board by the National Social Security Fund (NSSF), subject to ratification by the electricity company’s annual general meeting at Sheraton Hotel in May, 2018.
His name was however, rejected by majority of the shareholders, who accused him among others of “being a spoiler” and “negative publicity” arising from the Office of the Prime Minister (OPM) corruption saga.
Bigirimana sits on Umeme board in his capacity as Permanent Secretary, Ministry of Gender, Labour and Social Development.
NSSF holds 23.2 percent of the shares and is the biggest institutional shareholder, the basis on which it holds two positions on the Board of Directors.
Rukutana speaks out
In a letter dated May 30, 2019, Rukutana said no reason was given by Umeme in the resolution filed at the registry of companies on June 5, 2018 for rejecting the nomination of Bigirimana.
He cited Article 83 of the Amended Articles of Association which provides for disqualification of Directors such as unsound mind, bankruptcy, resignation and absence from meetings.
“None of the above grounds were given as reason for rejection of Mr Bigirimana’s nomination…” said Rukutana in his letter to Gender Minister, Janat Mukwaya dated May 30, 2019.
The AG further said in view of the fact that the board of Umeme had held one-on-one consultations with NSSF as the biggest shareholder and accepted the nomination of Bigirimana and appointed him as director pending ratification by the AGM, the “board had the obligation to act in the best interests of the company by ensuring that the grounds of evidence for disqualification of nominated directors be given in accordance with the Articles of Association of the Companies Act.”
Rukutana emphasised: “This was not done and therefore a breach of the law and principles of natural justice.”
The AG further said Umeme had to ensure the voting had “to be by a poll as NSSF is the biggest single institutional shareholder/investor and its proposal should be given due consideration because it represents workers’ interests and government.”
Rukutana said the board of Umeme should “therefore review the resolution put to the AGM and hold an extra ordinary general meeting to ratify the nomination of Mr Bigirimana because the decision was taken in disregard of the legal rights of NSSF to have a poll and violated the rights of Bigirimana for being accused and condemned without violence.”
Mukwaya had asked Rukutana to also guide her on whether anyone can refuse to implement the directive of the president.
Museveni had ordered the Finance Minister Matia Kasaija to investigate the complaint of workers on Bigirimana’s appointment to the Umeme board and ensure his appointment to safeguard workers’ interests.
Kasaija reported back to Museveni, saying Bigirimana’s nomination was rejected on the “ground of previous bad publicity and adverse perception” among the public including “Umeme shareholders.”
Rukutana said the Companies Act and the Articles of Association of Umeme Ltd provides grounds for disqualification of Directors.
“It is therefore unfair, illegal and not good corporate governance to reject the nomination of a Director based on hearsay in disregard of the Articles of Association and the Companies Act,” said Rukutana.
“The directive of the president to ensure the appointment of Bigirimana should be implemented. The Finance Minister should review the grounds for rejection given in his report as they are not based on evidence in accordance with the law. He should advise Umeme Ltd that the decision to reject the appointment of Bigirimana was flawed and it is not acceptable to NSSF and government on the grounds given above.”
Bigirimana was not readily available for comment when we contacted him on his known mobile phone.