UTL saga: Court to decide Bemanya’s fate tomorrow

High Court will tomorrow deliver its verdict on an application in which one of the creditors of Uganda Telecom Limited (UTL) is seeking to replace the current administrator, Mr Bemanya Twebaze.

Justice Lydia Mugambe of the Civil Division of the High Court set the ruling date after hearing of submissions in regard to an application by the Uganda Contribution Employees’ Contributory Pension Scheme (UCECPS). UCECPS is one of the major UTL creditors, with its debt standing more than Shs12.2 billion.

Through their lawyers of Kwesigabo, Bamwine and Walubiri Advocates, the creditors accuse Mr Bemanya of failing to perform his roles in regard to collecting the outstanding amounts due to UTL from government departments.

They allege that Mr Bemanya failed to find an investor who can recapitalise and operate UTL as well as paying all claims against the company on time.

“That I know that the purposes of taking UTL into administration was to enable the company reorganise its affairs in such a way as to be able to settle the dues owed UCECPS and several other UTL creditors, rather than going into immediate liquidation,” Mr David Nkojjo, the UCECPS chairperson, said in a sworn statement.

Key issues
Mr Nkojjo contends that Mr Bemanya failed to pay workers’ outstanding contribution at the time of taking over and also to remit the current ones yet the same are being deducted from the workers’ pay.

He alleges that the debt owed to UCECPS has increased significantly instead of reducing and that UCECPS have lost confidence in the administrator’s capacity to turn the company around.

“That by virtue of the said statutory offices held by Mr Bemanya, he is not well positioned to continue as administrator of UTL, since this creates a potential conflict of interest and or challenges arising from the statutory roles assigned to him as the administrator,” the court documents add.

“He will, therefore, not be effective in his duties as contrasted by other roles assigned to the person of the official receiver and the registrar of companies under the Insolvency Act,” Mr Nkojjo adds.

However, Mr Bemanya, who was appointed the official UTL receiver in April 2017, states that at the commencement of administration, the telecom company was indebted to several creditors, including UCECPS to a tune of Shs709 billion against an asset base of Shs148 billion.

Mr Bemanya contends that UCECPS’ claims are to be satisfied by the proceeds of the sale of the property of the company and it is premature to conclude that he has failed to perform before the said sale.

“That in specific reply, on July 9, 2019, I held a meeting with the board of trustees of the applicant where there were updated that UTL is still insolvent and I committed to make payment as and when the funds permit,” his sworn statement reads in part.

Mr Bemanya states that he does not object to the appointment of a competent person to act as an administrator of UTL and that he is ready to handover to such a person as shall be guided by court.