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Distributor Drags Nile Breweries To Court For Being Repressive And Terminating His Contract In Bad Faith In Favour Of Another Person

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Nile Breweries operations manager Thomas Kamphuis

A distributorship battle has developed among Nile Breweries distributors with the Company top bosses being accused of siding with recent entrants against their longstanding distributors.

This battle has already culminated into a court case after one of the most affected companies, Salvation Distributors Ltd whose contract dates as far back as 2002 sued Nile Breweries over the said mistreatment.

“Prior to receiving the said email, the Managing Director of the Plaintiff (Salvation Distributors) company was approached by two officials from the defendant (Nile Breweries) company who requested him to sell off his business and goodwill to another distributor M/S Keshwala Group of Companies. The plaintiff’s Managing Director out-rightly rejected their request clearly informing them that he had no intention of selling off his business,” reads in part the court documents

Salvation filed at the High Court Commercial Division showing how Nile Breweries crafted the plot to throw him out of business for another distributor Keshwala. Salvation had an agreement with Nile Breweries to be the sole distributor of its products in the areas of Kyengera to Kayabwe and Maddu in Mpigi district.

According to the various documents attachment to the case, Salvation’s profits have been high since 2002. Due to the huge profits, In 2017, Nile Breweries requested Salvation’s Managing Director Gregory Gidagui Mafabi to set up a state-of-the-art Warehouse at Kayabwe.

Gidagui invested Shs2.5bn in the construction of the warehouse and purchase of new trucks, he ensured that the “return to issue (RTI) of the empties” was above 97% by purchasing more than 4000 empty bottles.

Gidagui adds that he was also forced to dispose off a number of properties as well as obtain credit facilities from various banks to raise the necessary funds to comply with the defendant’s new terms and conditions.

“Further to the above investment, Salvation Distributors procured a Distribution Management System (DMS) hardware as directed by Nile Breweries at a cost of Shs11.4m,” he stated. Nile breweries insisted that for better distribution of their product, Salvation Distributors had to change to this system which they sold to Gidagui and promised him that they were going to train his employees on how to use it. Salvation Distributors alleges that they fulfilled all the conditions.

While launching its Shs2.5bn store in 2017, Nile Breweries operations manager Thomas Kamphuis was marveled at the great work and effort made by Gidagui. In a surprise turn of events, Gidagui waited for experts from Nile Breweries to train his staff on how to use the DMS to no avail and indeed, according to court documents, none of his staff has been trained to-date.

As he was still waiting on the experts to come and train his staff, Gidagui started receiving inadequate supplies of Nile Breweries products yet he had stepped up his capital. He wrote to them and Kamphuis promised to work on the issue. To his utter shock and surprise, Nile Breweries instead sent him a letter dated May 28, 2018 informing him that they had received communication from him stating that because of inadequate supplies, they had decided to terminate his contract with them and they had decided to find an alternative distributor for his area.

He wrote back on the same day informing them that he had not and has never developed any interest in terminating his distributorship contract with Nile Breweries. Nile Breweries new manager informed him that he was new on the job, he called for a meeting with Salvation Distributors on July 2, 2018 to discuss his issue. Surprisingly, while he was waiting to meet the Nile Breweries MD, he received a letter from the top management of the company asking him to sell his Goodwill to Keshala which he rejected.

“On July 2, 2018, when MD Gidagui arrived at Nile Breweries offices for the meeting, he was given a notice of termination of distributorship agreement. According to the said notice, the reason for the termination was his failure to use the Distributor Management System,” read in part the court documents. When Gidagui tried to appeal, he was told that the notice of termination was final. Through his lawyers of Muwema, Advocates and Solicitors, Gidagui says Nile Breweries did not act in good faith to have this dispute settled since they were partly to blame for failing to train his staff.

Muwema says that none of the other distributors were given the same conditions to fulfill as his client and worse of all, he is being punished for failing to surrender his business to someone else. Muwema says that none of the current distributors matches Gidagui’s record.

“At the trial, Salvation Distributors shall also aver and contend that the alleged failure to use the DMS is not a ground for termination of distribution agreements; consequently, Salvation seeks damages for breach of contract against the defendant (Nile Breweries). Salvation shall further aver and contend that Nile Breweries’ acts of issuing a notice of termination which was unfounded was high-handed, repressive and done in bad faith for which he seeks exemplary damages,” he states.

The High Court Commercial Division Registrar Festo Nsenga has already issued an Interim Order blocking Nile Breweries from completely terminating Salvation Distributors’ contract.  In his ruling delivered on Monday, Nsenga stated that this interim order should stay in place till September 25, 2018. “It is hereby ordered that: an interim order is hereby issued restraining the respondent (Nile Breweries), its agents and or servants from enforcing the Notice of Termination dated June 26, 2018 and July 16 threatening to terminate the Distributorship Agreement dated October 3, 2002 between the Applicant and the Respondent (Salvation Distributors), for marketing, selling and distributing of the respondent’s products in the areas of Kyengera, Kayabwe, Maddu and Mpigi District, pending the hearing of the main Application (HCM/640/2018) on September 25, 2018,” Nsenga ordered.

He adds that this order is subject to extension where necessary. The order was issued in the absence of lawyers or representatives from Nile Breweries despite having been served with this application and responding to it. Salvation distributors was fully represented by its lawyers Fred Muwema and Charles Nsubuga.

Our efforts to talk to Nile Breweries were futile as our calls went unanswered.

 

By Jamil Lutakome     

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NOT OVER YET: Bank Of Uganda Files Notice Of Appeal Challenging Judge Wangutusi’s Judgment, They Want Sudhir To Vomit Shs397 Billion..

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BOU Governor Tumusiime Mutebile and Sudhir Ruparelia

The Central Bank through their lawyers of Byamugisha and company Advocates have filed a notice of appeal in the court of appeal challenging High Court commercial division judge David Wangutusi‘s judgment to recover over 100 million dollars (Shs397 billion) from tycoon Sudhir Ruparelia and Meera  Investment Limited. 

On Monday, The Head of Commercial Court, David Wangutusi dismissed a case in which Bank of Uganda (BoU) Sudhir Ruparelia for allegedly fleecing his own bank (Crane Bank in receivership) of Shs397 billion in fraudulent transactions. The Central Bank was seeking to recover the Shs397bn.

Wangutusi also ordered BoU to pay Sudhir’s legal costs. In his ruling, Wangutusi observed that Crane Bank in receivership at the time of instituting the commercial suit against the businessman and his Meera Investments Company, was none existent, hence never had powers to sue.

Wangutusi added that Bank of Uganda lacked legal basis to sue Sudhir for allegedly transferring sums money from the internal accounts of the defunct Crane Bank which were not mapped on the financial institution’s balance sheet.  BOU claims that the learned judge errored when he dismissed their suit because there was credible evidence that Sudhir withdrew 80,000,000 dollars from Crane Bank as payments to persons, companies and entities for Sudhir’s benefits. 

 The central bank further claims that Sudhir withdraw Us9.27m through Technology Associates which has no contract with Crane Bank or Meera investments. The central bank wants the three justices of the court of appeal to declare that Wangutusi errored in facts and law to dismisses their suit against the city tycoon. The bank claims that Sudhir mismanages the tax payer’s money worth shs400bn which was withdrawn from the treasury to save Crane Bank. 

Tycoon Sudhir celebrated the dismissal of the BOU suit and revealed to journalists that he has defeated BOU mafias who stole his bank.

By Sengooba Alirabaki

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OPINION: Free Trade For African Countries: Continental Block Will Spur Trade And Develop Africa

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In his book, “Sowing The Mustard Seed”, Second Edition, President Museveni articulates the case for Pan-Africanism with a slant, in part, to business dividends. “The milk production of Uganda is now 2 billion litres, up from 200 million litres in 1986. Uganda, however, currently, consumes only 800 million litres per annum”. He adds that; “What will happen to the rest then? This is true of bananas, goats, cattle, fruits and other products? Our second layer of saviours are the East Africans, the South Sudanese, the Congolese and other regional partners”.

The President has been, and remains a strong advocate of regional integration in Africa. Now, further to the likes of EAC and COMESA, the big one is here. The African Continental Free Trade Agreement (AfCFTA) endorsed by African Union (AU) Member States in Kigali, in March 2018, takes effect next year. This, after the ratification of the operational aspects of AfCFTA, at an AU extra-ordinary Summit in Niamey, Niger on 7th July 2019 – The New Vision, 20th July 2019.

The essence of Niamey pact is that Africa’s Free Trade Area will be operational effective July 2020. In Niamey, the necessary instruments were signed by the required minimum 22 AU Member States, including Uganda. It is a major break-through for business across the continent. With 55 Member countries, Africa’s Free Trade Area will dwarf ALL trading blocks, including the EU, in terms of membership. 

AfCFTA is bringing together a combined market of 1.2 billion people and economies with an aggregate GDP of USD 2.5 trillion. It is a huge market under which countries in Africa, will trade with each other, minus tariff barriers. AfCFTA will spur industrialization, grow economies, create jobs, strengthen indigenous capabilities and ease Africa’s vulnerability to external trading shocks.

For Uganda, niche items include fresh, organic grain foodstuffs, which have ready market in countries like Congo, Angola, Senegal, Namibia and the Saharan, North African Countries. Our other niche items include milk, fruits, fish, beef and household consumer items. Uganda is also progressively building capacity in oil and gas and services like tourism and ICT innovations, from which we stand to reap, among others. 

Intra-Africa business will slash Africa’s trade deficit, considering the continent imports food items alone, worth USD 60 billion annually. Relatedly, under the current skewed trade regime, intra-Africa business is at 16% while that with Europe, for instance, is at 65%.

Therefore, the AfCFTA will unlock Africa’s massive economic potential, right from the short term. Indeed, intra-African trade is now projected to rise to 60% by 2022. Retaining the USD 60 billion Africa is “donating” to Europe in annual food imports, will greatly boost the continent socio-economically.

In a riveting address, at a Nelson Mandela Memorial Lecture at Makerere University on 31st August 2017, President Museveni submitted that; “Africa is a huge continent with a land area of 11.7 million square miles, which makes it 12 times bigger than India, 4 times bigger than USA and China each and more than 2 times the size of Russia. We are somewhat working on economic integration through the Regional Economic Communities; although we should be more religious and focused on this issue”. 

Credit to him and other regional leaders for bringing AfCTFA to life. We should, therefore, position Uganda tap into this huge continental market. Priority considerations include accelerating industrialisation, improving product/service value chains, fast-tracking oil, gas, energy and minerals’ development. Others are expanding transport and ICT infrastructure, enhancing agricultural production and aligning our fiscal policies, as may be applicable.

Moses Watasa

Commissioner, Communication and Information Dissemination

MINISTRY OF ICT & NATIONAL GUIDANCE

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Battle For Supremacy At Vision Group As Bukedde News Editor Fires His Deputy’s ‘Diehard’ Reporters

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All is not well at Robert Kabushenga’s Vision Group premises especially Bukedde Newspaper newsroom.

According to multiple sources from the industrial area based printing and publishing house, the war is between Bukedde news editor Ssalongo Richard Kayira and his deputy Semei Wesaali.

Sources told the Grapevine that the silent war erupted when Kayira, the head of the news room published an internal memo with a list of news reporters fired from Bukedde newspaper.  According to sources, Kayira also ordered the security at the gate not to allow the journalists on the list to enter the company premises.

“The list was published but they did not inform us that we were going to be fired,” one of the journalists on the list complained.

The affected journalists petitioned their boss Godfrey Kulubya the head of all the local newspapers at Vision Group.  In their petition, the over 50 reporters told Kulubya that the list is discriminative.

‘The list targeted some individuals because they are diehards to editor Semei Wesaali. Kayira thinks that they are helping him take his position,” one of the reporters who petitioned Kulubya stated. They further explained to Kulubya that there are names of people which were left out yet they are poor performers when compared to some of the people on the list, they even cited some names.

Kulubya was told that most of the journalists left out were working under Kayira in his new DGF project.

On Monday this week, Kulubya called an emergency meeting in Bukedde new room and asked for a written explanation from Kayira why he fired staff without his knowledge or that of the Chief Executive Officer Robert Kabushenga.  Kulubya denounced the list and asked the journalists in the meeting to tell their friends who were fired to come back and work with immediate effect.

“For your information the competition is high so you cannot start firing staff, if it is necessary, let us follow the necessary procedures,” Kulubya was quoted telling the newsroom.

Kulubya further told the meeting that they have plans of laying off a number of reporters so that they can remain with a few competitive ones.

Sources told this website that Vision group bosses are trying to set up new rules where journalists multi task for the various platforms.

According to the new plan, a journalist, when assigned to cover a story, is supposed to file it for New Vision newspaper, Bukedde newspaper, Bukedde radio and Bukedde TV.

When the news about the new plan fell in the ears of reporters, some panicked and bought video cameras and recorders to quickly adapt to the new rules.

When the Grapevine talked to some of the reporters who were not on the list, they disclosed that the journalists who were fired are lazy and don’t want to work. They are just using Bukedde newspaper as an address to extort money from the public.  

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