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Libyans vow to take on Uganda after `quitting’
It is not clear what the Uganda government’s plan is since it announced that the Libyan owners of Uganda Telecom Ltd (UTL) have quit, but the move might get dirty if the Libyans instead implement a fight for the company.
The government announced on March 01 that it was taking over UTL following failure by the Libyan majority shareholders, the Libyan Post, Telecommunications & IT Holding Company (LPTIC), to inject more money into the venture.
The government move came five days after LPTIC announced it was stopping further funding UTL on Feb.25.
Stephen Kaboyo, the UTL Board chairperson in an interview with The Independent described the departure of the Libyans who controlled 69% of the company as a “voluntary abandonment”.
Kaboyo explained: “The reason why I say voluntary abandonment is that they were not forced to leave UTL. They decided to exit on their own and are no longer interested in the affairs of UTL. This is exemplified by their decision to instruct their board members to resign.”
“These are people who invested a lot of money in the company and possibly have looked at the financial standing and realised that their return on investment is very low and/or the market dynamic cannot sustain UTL’s operation.”
Voluntary abandonment is a technical word meaning voluntary surrender of an asset by an entity to which the asset rightfully belongs without the entity indicating a successor to the right of ownership of the asset.
Under law, an abandoned asset is taken over by the state. However, there are procedures to be followed and it not clear if they were indeed followed.
Any omissions often pop up to frustrate business transactions in cases like this, experts say.
Launched on the back of the late former leader Muammar Gadhafi’s Libyan oil largess, UTL has been limping without funding since he was ousted and killed in 2011.
The takeover appears to have cut short plans by LPTIC to invest $34.6 million in fibre upgrade and expansion, unveiling of the 4G technology, and an upgrade of services.
Following the takeover, LPTIC which is the parent company of UCOM has told The Independent that they could contest the government decision if their rights as the largest shareholder in UTL are not respected.
“The decision to cease funding was not made lightly,” a statement sent from LPTIC in Tripoli on March 03 said in part, “It followed 14 months of intense engagement with the Government of Uganda to seek to agree on the terms of a Transformation Business Plan for UTL, which included an indispensable funding offer from the Majority Shareholder”.
LPTIC warned the Uganda government: “Moving forward and notwithstanding the decision to discontinue funding UTL, the Majority Shareholder expects the Government of Uganda to fully comply with applicable laws and best practice concerning the protection of its investment interests in UTL, including with respect to its rights as UTL’s largest creditor. As a Majority Shareholder, the Libyan Post, Telecommunications & IT Holding Company will contest any plans or efforts to undermine its position”.
