The Deputy Attorney General Mr Mwesigwa Rukutana has disregarded a directive to apply to Court for the removal of Mr Bemanya Twebaze as the Administrator of Uganda Telecom Limited (UTL).
Mr Twebaze was appointed as an administrator of UTL following the exit of Ucom Limited, a Libyan firm that owned 69 percent shares in the struggling telecom company in March 2017.
Mr Twebaze is also the head of Uganda Registration Service Bureau entered into an Administration Deed and the UTL shareholders ceded to him all their powers to run the company.
But early this week, the State Minister for Investment, Ms Evelyn Anite said that government had encountered considerable difficulty dealing with Mr Twebaze and completely lost confidence in his ability to continue serving as an administrator.
Ms Anite, to that effect, asked the Mr Rukutana to apply to the court for orders replacing Mr Twebaze.
However, Mr Rukutana says that Ms Anite has no supervisory powers over the UTL administrator.
He explained that the removal of an administrator from office requires that a creditor would be the person listed as competent to apply to the court to remove an administrator from office.
“Whereas some government entities may be listed creditors, they have separate legal status. Accordingly, a shareholder in this instance, the Minister of Finance Planning and Economic Development has no locus to apply to the court to remove the administrator from office,” Mr Rukutana said in a June 28 letter.
He further guided that the grounds to remove an administrator must relate to failure to comply with the duties imposed on the administrator under the Administration Deed, the Insolvency Act or any other law or any orders and directions of court adding that he had not found any fault on the part of the administrator that warrants his removal.
“I have taken due cognisance of the fact that the administration process has been extended on three occasions and on the last two occasions, it was done with the consent of the Minister of Finance. This consent is evidence of satisfactory performance by the administrator and the grant of an extension by court is further confirmation of this position,” Mr Rukutana says in the letter.
Mr Rukutana further faults Ms Anite’s quest for Mr Twebaze’s removal on grounds that it undermines a ruling by the Speaker of Parliament, Ms Rebecca Kadaga who clearly stated that administration is a court-controlled process and that neither the legislature nor the executive should interfere with.
“I accordingly advise that the Minister of Finance as a shareholder of UTL has no locus to apply to Court to remove the administrator and any such application is bound to fail,” Mr Rukutana said.
The letter indicates that any interference with the administration procedure might curtail the process of sourcing for a strategic investor which is one of the duties of the UTL administrator.
Mr Rukutana also warns that if the company shareholders frustrate the efforts of the administrator to achieve the purpose of the Administration Deed, the process may be challenged by the creditors and other shareholders and the company may end up in liquidation.
Mr Twebaze’s current mandate as administrator UTL expires on November 22, 2019, following a ruling by High Court Judge Lydia Mugambe, which extended the administration period for 1 year commencing November 22, 2018.
Following demands by Ms Anite to have an audit carried out on UTL, the Mr Twebaze has declined the process insisting that the insolvency laws of Uganda require him to work independently of the shareholders with progress reports made every six months to the company’s creditors and submit copies to court and Registrar of Companies.