URSB dismisses fertilizer firm case against Prof Kagonyera & Co
The Uganda Registration Services Bureau (URSB) has dismissed a case against former Makerere Chancellor Prof.Mondo Kagonyera and colleagues for allegedly mismanaging a fertilizer company and as well registering another fraudulently.
Arthur Tumuhimbise alleged that Kagonyera, Julius Turyamwijuka and Edwin Mwesigye fraudulently managed a fertilizer firm-Bokashi Group Uganda Ltd where he was a minority shareholder.
He also accused the trio of starting another firm called Fertiplus Organic Ltd behind his back hence infringing on his economic rights by frustrating business, diverting contracts, and unfair business competition caused by the registration of a new fertilizer firm.
Tumuhimbise further said that the trio’s actions undermined the Companies Act and other enabling laws and principles of company management.
He was also seeking shs 2,972,919,298 in compensation.
He further pushed for de-registration of Fertiplus Organic Ltd and that its directors be ultimately apprehended and punished through fines or imprisonment or both.
The Kagonyera & Co lawyers of A.Mwebesa & Co advocates denied the allegations and contended that Fertiplus Organic Ltd was registered after Tumuhimbise frustrated their fertilizer business under Bokashi.
And left with no option, they had to form another one without him.
He was accused of intentionally refusing to attend strategic company (Bokashi) meetings, signing bank cheques (being a signatory) and as well mismanaging the company’s assets and funds as a manager at the warehouse.
Defence lawyers also insisted that Tumuhimbise had no locus to file an action against Fertiplus, had no cause of action and that Bokash was also wrongly added to the suit.
They prayed for dismissal of the application on grounds that it lacked merit.
URSB RULING
In his July 16, 2024 ruling, Solomon Muliisa, the Registrar of companies ruled that URSB lacked jurisdiction to entertain the case.
“I find that the Registrar has no jurisdiction to hear and determine the various claims filed by the applicant nor to grant the prayers sought. Having found that the registrar of companies is not vested with jurisdiction to hear and determine this matter, I find no reason for resolving the other three preliminary objections. The application is accordingly dismissed with no order made as to costs,” Muliisa who wrote the judgment said.
Dismissing the case, Muliisa said Tumuhimbise’s case does not call for URSB interpretation and determination and the remedy for it lies before the ordinary courts of law (High Court) emphasizing the seriousness of jurisdiction in any judicial proceeding.
“The forum for derivate actions is High Court and not the Registrar of companies. Similarly, actions for breach of director’s duties can only be brought before the High Court and not the Registrar of Companies. The applicant also does not cite the provisions of the law that grant the Registrar power to adjudicate and grant remedies sought, including, surprising, the order for penalization of the 1-3rd respondents by fine or imprisonment or both!” Muliisa stressed.
He further pointed out: “The applicant also seeks deregistration of the 4th Respondent but does not point me to any section that grants the Registrar such powers in the circumstances of this case. The rest of the claims such as claims based on lack of information and prayers to direct the respondent to avail various documents do not have legal basis and Counsel for the applicant has not drawn my attention to any provision of the law. They could for instance be invoked procedurally in form of disclosure but only if the applicant has filed the correct causes of action in High Court.”
Contacted for a comment following the ruling, Tumuhimbise said he regretted running to URSB saying it was a waste of time.
“This [ruling] totally makes me lose sense of meeting the URSB tribunal. In conclusion they have wasted time,” he ranted.
He said he will sit with lawyers, go back to the drawing board and ponder the next course of action.
Prof.Kagonyera & Co have been contacted for a comment on the ruling.