29 July 2010

Uganda: National Bank of Commerce in Court

Kampala — Retired Supreme Court judge, George Kanyeihamba, has queried the Commercial Court over the legality of the National Bank of Commerce (NBC), saying it was wrongfully reconstituted.

Through his lawyer, Godfrey Lule, Kanyeihamba alleges that the bank's name was changed from Kigezi Bank of Commerce without his authorisation and that of 320 other shareholders.

They now want the name, Kigezi Bank, to be re-instated and NBC cancelled.

According to the application filed in court on July 16, Kanyeihamba wants the Commercial Court to grant him leave to "institute a representative suit on behalf of himself" and the 320 other shareholders, against three high profile people from Kigezi.

The aggrieved accuse Ruhakana Rugunda, Uganda's permanent representative at the UN, Amama Mbabazi, the security minister and Amos Nzeeyi, a local tycoon, of being behind the illegality.

The bank was jointly founded in 1991 by the accused together with Kanyeihamba and Amos Bakaine to provide banking services and soft loans to people in Kigezi.

The retired judge also wants court to task the registrar of companies to explain how the alleged illegality was carried out without adhering to procedure.

According to NBC's share partition, Rugunda, Mbabazi and Nzeyi are the majority shareholders, with 86% shares.

Kanyeihamba, together with the 320 other shareholders who include Ezra Suruma, a former finance minister and now a presidential advisor, Jim Muhwezi, the former health minister, own the remaining 14% of the shares.

Lule told The New Vision on Wednesday that Kanyeihamba explained to him that "NBC wasn't properly incorporated under the law" because Kigezi bank was the only properly incorporated institution.

The aggrieved further allege that the trio "changed shares and share structures of NBC and reconstituted the share structure," saying it was unlawful.

The trio is also accused of "breaching procedure and disrespecting" the minority shareholders, when they changed the bank's name without convening to get their consent.

In October last year, the Abu Dhabi Group representative and current chairman of the bank announced they had injected $10m (about sh20b) to capitalise the bank.

Court is yet to fix a date to hear the application for orders to grant Kanyeihamba permission to file a suit against the trio on behalf of the 320 others.

Copyright © 2010 New Vision. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.