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Uganda Baati set for legal battle with minority shareholders





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Failed mediation efforts and the entry of new petitioners are likely to shape the outcome of a landmark transfer pricing case filed by minority shareholders against Uganda Baati Ltd, a manufacturer of roofing sheets and steel bars. Court hearings commence in April 2019.

The case was filed in Uganda’s High Court on November 9, 2016 by Andrew Muhimbise, Margaret Kiwana, Anna Mwewulize and Jesse Ibanda against Uganda Baati Ltd, Safal Investments (Mauritius) Ltd and the registered trustees of the Chandaria Foundation, according to court documents.

The petitioners asked the court to compel the majority shareholders of the company to buy out their shares at market value and also order a forensic audit into previous related transactions.

Under transfer pricing, companies and their subsidiaries sell goods and services to each other at prices higher than average market prices— a practice that is widely blamed for concealment of profits earned by multinationals in developing countries, and tax revenue losses suffered by poor economies.

According to court documents, Mr Muhimbise and Ms Kiwana owned 17,570 and 2,881 ordinary shares respectively in the company, while Ms Mwewulize and Mr Ibanda held 5,000 and 500 shares respectively.

Registered trustees of the Chandaria Foundation and Safal Investments owned 49,085 and 982,620 ordinary shares respectively.

Under current judicial rules, all civil cases filed in the High Court and Tax Appeals Tribunal are subject to mediation between the parties in question with a view to reaching an amicable, out-of-court settlement. Such a settlement must be endorsed by the relevant court before it takes effect.

Failure to reach an out-of-court settlement automatically moves a case to the trial stage usually conducted in a judge’s courtroom.


After more than a year of mediation, the petitioners and Uganda Baati Ltd failed to reach an-out-of-court settlement. While Andrew Muhimbise initially tabled an offer price of Ush200,000 ($53) per share and gradually slashed it to Ush60,000 ($15.9) the company’s majority owners insisted on a final price of Ush40,000 ($10.7) during the mediation process.

“We gave the company a final buyout offer of Ush60,000 ($15.9) per share but it rejected it. This case has put pressure on the company pushing up its offer price for minority shareholders interested in exiting the business privately. For example, the company previously offered Ush1,000 ($0.27) per share but this has been raised to Ush12,000 ($3.2) and Ush24,000 ($6.4) per share in some cases,” said Mr Muhimbise.

New petitioners expected to join in the case include former chief justice, Samuel Wambuzi who owns 1,026 shares, and former deputy prime minister Henry Kajura who has 964 shares.

A lawyer for Baati blames the failed talks on unreasonable demands.

“We believe the main petitioners can find a better deal for themselves by engaging a third party. Some minority shareholders outside the case have managed to sell their shares in the company to third parties on a willing seller-willing buyer arrangement,” said Chris Bwanika, one of the lawyers representing Uganda Baati Ltd.

Among the minority shareholders who recently sold their shares in the company are Ms Kiwana, who received Ush115 million ($30,631), Joseph Okwenje who received Ush80 million ($21,308) and Rebecca Nambi who received Ush3.7 million ($990.8).

“Transfer pricing is complicated. Most transactions are structured in a complex way and require lots of exposure for a tax officer to internalise their dynamics. Ugandan courts have little experience with transfer pricing and may need specialised lawyers to guide the bench,” said Denis Kakembo, managing partner at Cristal Advocates, a Kampala based law firm.

The company’s total turnover grew from Ush159.5 billion ($42.5 million) in 2016 to Ush173.4 billion ($46.2 million) in 2017.

It recorded a net loss of Ush10.6 billion ($2.8 million) in 2016 but posted a net profit of Ush868.9 million ($231,431) by the end of 2017.

Total assets held by Uganda Baati Ltd increased minimally from Ush89 billion ($23.7 million) to Ush90.5 billion($24 million) during the same period, according to company documents seen by The EastAfrican.


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Public officers above 58 years and with pre-existing conditions told to work from home: The Standard




Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.


However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
SEE ALSO: Thinking inside the cardboard box for post-lockdown work stations
Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.

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Uhuru convenes summit to review rising Covid-19 cases: The Standard




President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow

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Drastic life changes affecting mental health




Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.

KBC Radio_KICD Timetable

Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.

Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.

The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.

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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.

In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020.  It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.

A study by Dr. Habil Otanga,  a Lecturer at the University of Nairobi, Department of Psychology says  that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.

The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.

KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.


Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.

As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.

“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”

Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.

“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.

Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.

“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”

Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.

“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.

Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.

Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.

She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.

Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.

“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added

Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.

“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and  also engage in   reading that would  help expand their knowledge.

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