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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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MTN Chairman Charles Mbire Quizzed Over Telecom Giant’s Saga

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MTN Chairman Charles Mbire has been quizzed over the MTN saga according to information obtained by the Grapevine.

Security sources have told this website that the tycoon was quizzed over activities of top expatriates (some of whom have been deported), who used the mobile system to try to distabilise national security by supporting subversive activities.

“These MTN bosses, some of who have been deported, were using the mobile money system to support some individuals who wanted to distabilise the country. Money from individuals from hostile countries was being passed through their MoMo system,” the security source told the Grapevine.

When quizzed further on what really took place during Mbire’s quizzing, the source told this website that this information is still confidential.  MTN CEO Wim Vanhelleputte was deported yesterday back to Belgium, three weeks after three of the company’s expatriate staff were expelled.

Security sources have also told the Grapevine that former Head of Legal and Lawyer Katamba Anthony recorded statements. The source added that MTN is also involved in under declaration of Mobile money transactions.

Three weeks ago, MTN Uganda’s general manager for mobile money Elsa Mussolini, an Italian citizen, marketing chief Olivier Prentout, a French national, and Annie Bilenge-Tabura, a Rwandan who was head of sales and distribution were deported. Ugandan authorities accused them of using their positions to “compromise national security.

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MTN WOES: Telecom Giants Confirm CEO Vanhellputte’s Deportation, Quickly Appoint  Ugandan As New Boss

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Telecom Giants MTN have confirmed that their CEO Mr. Wim Vanhelleputte has been deported from Uganda.
In a statement issued by MTN Group Corporate Affairs, MTN says that, “MTN confirms that Mr. Wim Vanhelleputte, the CEO of MTN Uganda has been deported from Uganda. MTN has not been notified of the grounds for the deportation and is working hard to establish precise reasons for the deportation.”
“We are understandably concerned about these developments and are engaging with the authorities to seek understanding that would lead us to resolving this matter.
To ensure business continuity, we have appointed Mr. Gordian Kyomukama, currently Chief Technology Officer, as Acting Chief Executive. Our focus continues to be on delivering the best quality products and services to our customers,” the statement further reads.

Mr. Gordian Kyomukama

Yesterday, Mr. Vanhelleputte was kicked out of Uganda back to Belgium after security forces got information that he was involved in subversive activities that were threatening the country’s security.
Mr. Vanhellputte’s deportation comes on the heels of deportation of three of his staff. Three weeks ago, MTN Uganda’s general manager for mobile money Elsa Mussolini, an Italian citizen, marketing chief Olivier Prentout, a French national, and Annie Bilenge-Tabura, a Rwandan who was head of sales and distribution were deported. Ugandan authorities accused them of using their positions to “compromise national security.

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TENSION: MTN CEO Kicked Out Of Uganda Three Weeks After His Three Staff Were Deported For Being A Threat To National Security

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MTN CEO Wim Vanhelleputte has been deported tonight back to Belgium, according to sources, weeks after three of the company’s expatriate staff were expelled.
Three weeks ago, MTN Uganda’s general manager for mobile money Elsa Mussolini, an Italian citizen, marketing chief Olivier Prentout, a French national, and Annie Bilenge-Tabura, a Rwandan who was head of sales and distribution were deported. Ugandan authorities accused them of using their positions to “compromise national security.
A deportation letter dated 14th February 2018, signed by Minister of Internal Affairs Jeje Odongo says that Vanhelleputte has been ‘deemed to be an undesirable immigrant’.
“And I further declare that this order shall be carried into effect by the removal of the said Wim Vanhelleputte by deportation and while waiting to be conveyed to the place of departure shall be kept in custody,” part of the deportation order reads.


Last July, MTN said armed men claiming to be from Uganda’s Internal Security Organisation “kidnapped” two of its contractors and forced them to open up the company’s main data centre, where they made an unsuccessful attempt to access it’s servers.
The telecom firm, one of Africa’s largest, has run into legal trouble elsewhere.

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