A city lawyer, Muzamil Bikanga, has sued government seeking to know how Rai Holding came to own the majority of shares in Kinyara Sugar Works, a firm which was previously public owned.
Under the initial agreement, Bikanga says government owned 51% of shares in Kinyara but along the way, its stake was acquired by Rai Holdings under unclear circumstances.
In the end, he says the taxpayers (public) lost out.
This public interest litigation is aimed at fighting misuse of public resources, Bikanga says.
Bkianga says Ugandans “have wantonly and deliberately been disenfranchised and denied of their right to own property comprised in the Kinyara public shares in violation of their constitutional right to property as guaranteed by Article 26 of the Constitution and Article 40 of the Constitution.”
He seeks general, punitive and exemplary damages to atone for the general public for violations elaborated in the foregoing paragraphs and also seek for an order for the defendants to account for the proceeds of the sale of the public shares.
The case
Bikanga says in 2006, Rai Holdings Limited bought 51% shares in Kinyara without following the due process. The 51% were held by government on behalf of the public but were “fraudulently and corruptly” stolen by Rai Holding, he says.
He claims the process of buying the shares was shrouded in secrecy and that there could have connivance with some influential people in government.
According to the share purchase agreement, government ceased being the owner of the remaining 49% shares which were meant for the public.
Bikanga says in 2008 after the sale of the shares, President Museveni wrote a letter surprised that privatization unit has never implemented a cabinet decision to transfer the shares to other public entities in particular Bunyoro Kingdom.
The then minister of Finance wrote and replied the presidents’ letter reminding him of the terms of the agreement between the government and Rai Holdings to the effect that an IPO must be done to deal with all other entities mentioned in the sale agreement of 2006.
In 2010 Museveni wrote a letter directing that Bunyoro Kingdom be issued with shares in Kinyara Sugar Limited as per the terms of the 2006 agreement.
ln 2017, Bikanga says Bunyoro Kingdom was given 10% shares basing on the cabinet decision and the 2006 agreement.
However, Bikanga says government then secretly entered into another agreement with Vectrum Uganda Limited in which 3,97o shares of other entities were fraudulently transferred to it.
Some of these shares belonged to the workers of Kinyara Sugar Works and they sued government. They were later compensated. Therefore, Bikanga says since 2006 only Bunyoro Kingdom has got its shares among all other public entities.
Prayers
Bikanga wants court to declare that the general public (including him) are entitled to buying 7,654,226 shares within Kinyara Sugar Works.
He wants a declaration that government, Rai Holdings, Kinyara Sugar Works and Vectrum Uganda Limited conspired to defraud the general public (Ugandans) when they sold and transferred the disputed public shares.
The defendants have been given 15 days, from June 14, to file their defence. If they fail, court will proceed to hear the suit and issue judgement without their defence.