The late Garuga Kampala, Uganda | URN | Uganda Registrations Services Bureau-URSB has overturned Agaba Maguru’s appointment as director in three companies that were majorly owned by the late businessman James Garuga Musinguzi. It stems from an application filed by Mathew Rukikaire, former Minister of Privatization in President Museveni’s government, challenging the manner in which Maguru, who is described as an advocate of the high court, was appointed as new director. In the application, Rukikaire stated that he is a shareholder of Garuga Properties Limited holding 0.45% of the issued share capital.
On the other hand, Garuga Properties Limited holds the majority shares in Kinkizi Development Company Limited and Incafex Limited. Garuga-Musinguzi was director in all three companies who held the majority shares. Following his death last year, there were extraordinary general meetings that installed Maguru as the new managing director.
However, Rukikaire opposed this arguing that the resolutions purportedly passed and the consequent filings made in furtherance of those actions were neither validly authorised nor lawfully adopted and were therefore incapable of conferring any legal rights to Maguru. In response Maguru denied the allegations arguing that Rukikaire’s shares were so negligible to substantially influence how the companies run. Another director in Garuga Properties Ltd Nganwa Henry Hapa, argued that Maguru had been validly appointed to the Board.
They also argued that Rukikaire was not even a shareholder in Kinkizi Development Company and Incafex and thus, had no locus to challenge its shareholdership. But in his ruling, Daniel Nasasira, the assistant registrar of companies said Rukikaire’s grievances are valid. “As a shareholder of Garuga Properties Limited, the Applicant possesses a direct and legally recognisable interest in the second and third Respondent Companies.
His interest falls squarely within the category of an “interested party,” Nasasira’s decision reads. “I am therefore unable to accept the Respondents’ contention that the doctrine of separate corporate personality completely extinguishes the Applicant’s standing in the circumstances of this case. While that doctrine preserves the distinct legal identity of each company, it cannot be applied so rigidly as to deny a party who demonstrates a direct and legitimate interest in the impugne…
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