Law society backs Rukutana on UTL, Anite calls Museveni

Kampala. As the fight surrounding who is supreme in running the affairs at Uganda Telecom (UTL), the Uganda Law Society (ULS) has weighed in calling on the government not to deviate from the Attorney General’s opinion on the matter.
The lawyers, in a statement dated June 29, said they have a 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.

For more than a week, matters concerning the management of UTL have generated debate after the State minister for Privatisation and Investment, Ms Evelyn Anite, said government had lost control over the company in which it owns 31 per cent shares.

The minister has since started a process of removing the UTL current administrator Mr Twebaze Bemanya, accusing him of being defiant to the government’s effort to get accountability of revenues being generated by the company since he was appointed administrator in May 2017.
However, a sharp disagreement has ensued between Ms Anite and Mr Mwesigwa- Rukutana, the Deputy Attorney General, after the latter in a letter on June 28 gave a legal opinion saying the minister does not have supervisory power over UTL while under insolvency.
However, Ms Anite insists that Mr Bemanya, who also is the Registrar General of Uganda Registration Services Bureau (URSDB), must be removed and replaced as the administrator/official receiver of UTL because he has been insubordinate to the Ministry of Finance by refusing to be audited.

In a statement issued on Saturday, the Uganda Law Society President Simon Peter Kinobe argued that the Deputy Attorney General acted within the law not to take Ms Anite’s instructions to make an application in court seeking the removal of Mr Bemanya.
The lawyers’ body says Ms Anite is a shareholder in UTL and by the insolvency law, shareholders cannot be supervisors of such a company under administration.

“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 statement reads in part.
USL states that in the current circumstances, the UTL creditors’ interests take precedence over the interests of the shareholders.
“Therefore, the Hon. Minister of Finance as a shareholder cannot be held out as the supervisor of the administrator of “his” insolvent company,” Mr Kinobe added in the statement.

The ULS said though it does not have the mandate to advise Cabinet, it concurs with Mr Rukutana because administration is an insolvency process with clear consequences under the Ugandan law.
He cited Section 155 of the Insolvency Act, which provides that “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.”

In a seeming fallout between Ms Anite and Mr Rukutana, the former shortly after receiving the legal opinion, instead wrote to the Attorney General Ms Willian Byaruhanga, accusing his deputy of giving an “offside reply” that is itself “flawed innuendos/opinions”
Ms Anite who stated that a meeting held in Finance Ministry on June 20 concluded that; “Mr Bemanya Twebaze is a crooked lawyer and entrenched in Attorney General’s office” and that there is a cartel in sections of government that is keen to have UTL liquidated and sell to themselves the strategic assets of the Company. She asked Mr Byaruhanga to implement her earlier directive.

Overstepping the mandate
“The purpose of this letter is to implore you to have the petition to remove the Administrator of Uganda Telecom filed in Court without further delay,” Ms Anite wrote.
But the ULS insists Anite has overstepped her mandate by giving orders to the Attorney General.

“Under our laws, no minister has the mandate or power to “order” the Attorney General to undertake any action. That the Attorney General, in his capacity as the principal legal advisor of the Government under Article 119 of the Constitution, may deem any act inappropriate or out-rightly illegal,” Mr Kinobe wrote in the statement. He said it is immaterial whether this function is performed by the Deputy Attorney General.

The lawyers’ body also advised the UTL Administrator to make public all documents of accountability he makes to High Court and all creditors every six months as required by the insolvency law.
Mr Bemanya has previously argued that he only sends the bi-annual progress report of UTL to court, all creditors and shareholders and that the books of accounts will be availed for auditing at the end of administration due on November 22, 2019.

Anite runs to President

Meanwhile, Minister Anite on Friday wrote to President Museveni updating him on what was going on with her plan to remove Mr Bemanya from office.
In the same letter, Ms Anite says she is baffled with the actions of the UTL administrator by not cooperating on the Ministry’s demand for auditing and she challenged Mr Rukutana’s opinion that the minister has no supervisory mandate over UTL Administrator.

“Your Excellency, I have failed to understand the source of this allegation by the Deputy Attorney General especially since it was never contained in my letter of June 26, 2019. We have not sought to supervise the work of the administrator although I must emphasise that he has availed progress reports on his work which he no longer considers necessary for reasons that have not been explained” she wrote.

Ms Anite, who said the Ministry has lost confidence in the UTL Administrator, sought Mr Museveni’s guidance on Mr Rukutana’s opinion, saying she believes the demand for accountability does not tantamount to interference with a company being managed under insolvency.

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