The High court in Kampala has appointed Ruth Sebatindira, the former president of the Uganda Law Society as the new administrator of Uganda Telecom Limited (UTL). Sebatindira will replace Nelson Bemanya whose contract expired in November 2019.
The decision follows an application filed on December 17, 2019, by the Uganda Contribution Employees Contributory Pension Scheme (UCECPS) through their lawyers led by Johnson Kwesigabo. They sought orders compelling Bemanya to be removed from office and replaced with a one Nicholas Mwasame or such other eligible insolvency practitioner.
The applicants faulted Bemanya for failing to collect the outstanding amounts due to UTL from the government and its departments in terms of the deed of administration and failure to find an investor to recapitalize and operate the telecom. Bemanya was also faulted for failing to pay in full all claims against UTL within the administration time and to conclude the administration within the period stipulated.
The government is the biggest creditor of UTL with a bill of more than Shs 207 billion. In a summarized judgement delivered today Thursday morning, Justice Lydia Mugambe of the Civil Division of the High court noted that Ssebatindira is a qualified and registered insolvency practitioner possessing sufficient experience and expertise to safeguard the interests of all creditors of the company.
The appointment of an administrator lies in the court and the same has powers to look at the list of all licensed insolvency practitioners and exercise its discretion to pick one and appoint him or her as the legible administrator.
Bemanya said he had no objections to appointing anyone competent to replace him, according to the defense put before the court by Bemanya's lawyer Mustafa Ntale.
"That nonetheless, I have no objection to the appointment of a competent person to act as an administrator of UTL and I am ready to handover to such appointed person guided by this honorable court," said Bemanya in his affidavit.
He also noted that he did his best as UTL administrator but only failed to achieve what was expected of him, not because of his inefficiency but that some processes take longer.
Last year, state minister for Investment Evelyn Minister Anite told parliament that Bemnaya had reportedly blocked the auditor general John Muwanga and Finance ministry from auditing the company, saying he can only report to the court. She added that the government, which holds 31 per cent shares in UTL, had lost control over the telecom company.
Bemanya, a registrar general of Uganda Registration Services Bureau (URSB), was appointed administrator of UTL following the exit of Ucom Limited, a Libyan firm that owned 69 per cent shares of the telecom. He entered into an Administration Deed and the shareholders ceded to him all their powers to run the company.
Anite then wrote to the attorney general to apply to the court for orders replacing Bemanya as the administrator of UTL. Anite said that government had encountered considerable difficulty dealing with the administrator and completely lost confidence in his ability to continue serving the role of UTL administrator.
But the deputy attorney general Mwesigwa Rukutana disregarded the request saying that the government did not have supervisory powers over the administrator. He explained that the removal of an administrator from office required an application by the creditor.
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.