27 firms seek to wind up Roko company over debts

Roofings has been joined by 26 other companies seeking a court declaration to have giant construction company Roko wound up for allegedly failing to pay huge debts.

It is estimated that Roko owes different creditors and suppliers up to Shs40b in local currency and $36m (about Shs131b).

Roko’s indebtedness was brought to light on December 11 when Roofings filed a suit in the Commercial Division of the High Court, seeking recovery of up to Shs165m and $552m yet its company bank accounts have since been drawn to zero balance.

“The company (Roko) be wound up by the court. The court makes an order for liquidation of the company. The official receiver of the court be appointed as liquidator of the company,” Roofings’ lawyers asked court.

“…. the company is insolvent and unable to pay its debts within the meaning of Section 3 of the Insolvency Act,” the suit further states.
At least 26 companies have joined Roofings in seeking court to wind up Roko Construction Company.

The 26 more companies too claim Roko owes them huge sums of money.
The insolvency suit was filed after court on October 20 ordered Roko to pay Shs165m and $555,580 (about Shs1.9b) it owes to Roofings subsidiary Rollings Mills.

On December 2, an execution order was issued against Roko and another on December 9, but it was unable to pay the debt as its accounts were in negative.

Court documents further showed that all Roko’s property is in control of banks, which have charges over it.

“…. the company (Roko) does not dispute the debt and is unable to pay its debts. The company’s bank accounts are all drawn to minimum and zero balance and the company has no money to pay its debts. 
The petitioner (Roofings) has searched for the company’s assets but has failed to find any that are not encumbered by debt,” Roofings further states in the court documents.

Following the suit, the Uganda National Association of Building and Civil Engineering contractors on December 17 wrote to Finance minister Matia Kasaija, pleading to bail out Roko.

The engineers argue that Roko has been very pivotal in the engineering and construction industry for the last over 50 years and that it should be bailed out of its ongoing financial crisis instead of letting it go down.

Roko company was incorporated in Uganda in 1969 and has over the last 50 years constructed iconic buildings and structures in the country. Some of the iconic buildings constructed by Roko include Mulago National Referral Hospital, Bank of Uganda and Crested Towers.

Last month, the Finance minister wrote to Roko managing director, assuring him that government was verifying the money it owes it up to the tune of Shs46b. “This is. therefore, to confirm to you that government of Uganda is committed to paying Roko’s outstanding debt within the next four months from the date of this letter within which the payment process will have been concluded,” Mr Kasaija wrote to Roko  on November 20.

Tomorrow court will hear the insolvency suit against Roko.
 
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