{"id":19750,"date":"2021-10-18T17:08:17","date_gmt":"2021-10-18T17:08:17","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/?p=19750"},"modified":"2021-10-18T15:08:32","modified_gmt":"2021-10-18T15:08:32","slug":"jovia-saleh-foreign-investors-fight-over-saracen","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen","title":{"rendered":"Jovia Saleh, foreign investors fight over Saracen"},"content":{"rendered":"<p><span style=\"color: #ff6600\"><strong><a href=\"https:\/\/www.africa-press.net\/\">Africa-Press<\/a> &#8211; <a href=\"https:\/\/www.africa-press.net\/uganda\">Uganda<\/a>. <\/strong><\/span>A bitter row pitting Jovia Kyomuhendo, wife of Gen Salim Saleh, and two South African nationals has weighed down one of Uganda\u2019s oldest private security companies, Saracen Uganda Ltd, to the point of dissolution or disintegration.<\/p>\n<p>The years-long-running dispute over ownership and control of the company has entangled law firm\u2014Kasirye and Byaruhanga Co., the registered company secretary, lawyer Hussein Kashilingi, who acts on Ms Jovia\u2019s behalf, and the Uganda Registration Service Bureau (URSB).<\/p>\n<p>The South African shareholders, Lafras Luitingh and Hendrik Pelser, alias Bill Pelser, highly placed sources say, accuse Ms Saleh of trying to irregularly take ownership of the company using her clout.<\/p>\n<p>They allege financial impropriety and mismanagement including staffing the company with kinfolks and friends while several long-serving employees have been constructively dismissed.<\/p>\n<p>Constructive dismissal, discharge or termination is a situation where an employee finds themselves with no option but to resign when an employer imposes unwelcome or hostile changes to their work terms.<\/p>\n<p>For instance, the company\u2019s chief executive is Alexander Akandwanaho, son to the Salehs, whom the South African shareholders allege was illegally appointed.<\/p>\n<p>The company, in this case Saracen, which formally trades as Saracen Uganda Ltd or SUL, has reportedly not held board meetings since 2016.<\/p>\n<p>Internal correspondences and accounts link the failure to convene the mandatory meetings to alleged frustrations by lawyer Kashilingi and the company secretary.<\/p>\n<p>No shareholders\u2019 meetings have as well been convened over the past five or so years at the behest of URSB, the government agency responsible for registration of companies, pending ruling on a shareholding dispute between Ms Jovia Saleh and the South Africans.<\/p>\n<p>Twice, High Court Judge Musa Ssekaana has ruled in favour of the South Africans on the shareholding dispute. But URSB insists it has the last say on the matter.<\/p>\n<p>Saracen Uganda Ltd was first registered in September 1995 as a special purpose vehicle owned by Saracen International Ltd (SIL) domiciled in the British Virgin Islands, a famous tax haven, taking 75 percent shareholding, and Special Services Ltd (SSL) holding 25 percent.<\/p>\n<p>At the time Mr Lafras was the sole shareholder in SIL. On the other, SSL held 25 percent of Saracen out of which Gen Saleh owned 50 percent; Lt Col Juma Seiko 10 percent, and, Jacob Samson Loumo 10 percent. The remaining 30 percent shares were not issued.<\/p>\n<p>The aim of the company was to \u201coffer employment opportunities to veterans\u201d of the National Resistance Army (NRA), the rebel group that brought President Museveni, who is Saleh\u2019s brother, to power 35 years ago.<\/p>\n<p>At inception, the company was first rumoured to be a government \u201cprivate mercenary army\u201d, but in an interview with this newspaper in 1995, Gen Saleh dismissed the claims saying \u201cit (the firm) is purely a commercial venture to utilise the skills and experience of \u201credundant NRA veterans.\u201d<\/p>\n<p>The timing was important. In 1995, Uganda enacted a new progressive Constitution in which the NRA was renamed Uganda People\u2019s Defence Forces (UPDF), which set the army on a professionalisation path from a ragtag rebel band.<\/p>\n<p>The reforms of the 1990s to downsize the public sector, most of it pushed by the Bretton Woods institutions, resulted in abot 60,000 NRA soldiers being retrenched between 1990 to 1996.<\/p>\n<p>It was the retrenched soldiers, feared at the time to possess both the skills and potential to cause insecurity, that now Gen Saleh in 1995 referred to as \u201credundant NRA soldiers\u201d and moved to absorb in an alternative security outfit.<\/p>\n<p>The company grew by leaps and bounds over the years, snapping up high-profile clients including oil exploration companies\u2014from Heritage Oil to Tullow Oil to Cnooc and TotalEnergies E&amp;P\u2014in mid-western Uganda, to building a modest asset base.<\/p>\n<p>The company is also poised to provide security to Uganda\u2019s 296km section of the proposed East African Crude Oil Pipeline.<\/p>\n<p>Saracen also ventured into Iraq and Afghanistan where it landed sub-contracts to provide security guards to the United States Department of Defence-contracted security firms such as Reed Inc and SOC LLC.<\/p>\n<p>According to company financials, by end of May 2018, SUL had a monthly turnover of Shs2.9b compared to a monthly average of Shs2.8b during the preceding financial reporting year. Guarding services alone fetched the company Shs6.6b annually.<\/p>\n<p>The company also unsuccessfully attempted expanding operations to neighbouring present-day South Sudan, the Democratic Republic of Congo (DRC) and Tanzania. Then, cracks emerged.<\/p>\n<p>Boom to burst<\/p>\n<p>A Daily Monitor investigation over the last seven months, including multiple interviews and review of hundreds of company documents including correspondences, internal emails, and court records, detail irreconcilable differences and deep cracks in the company\u2019s top management.<\/p>\n<p>At one time on November 17, 2017, Mr Lafras, a South African co-founder and shareholder, sought intervention of the then Uganda Law Society president, Mr Francis Gimara, to rein in on Mr Kashilingi for alleged misconduct including making personal threats.<\/p>\n<p>Two days before that, Mr Lafras, the Saracen board chairman, according to the email trail, threatened to fly to Uganda to convene a shareholders\u2019 meeting.<\/p>\n<p>\u201cLet\u2019s wait and see if you will set foot here [in Uganda],\u201d Mr Kashilingi shot back in the reply.<\/p>\n<p>Earlier on in 2016, a registrar at URSB at the behest of the minority shareholders\u2014SSL\u2014had initiated an investigation into affairs of the company. The registrar suspended all shareholders\u2019 meetings until further notice.<\/p>\n<p>The registrar, however, did not suspend board meetings which, according to several correspondences, both SSL and company secretary have spurned. On the other hand, the company\u2019s file in the registry contains up-to-date board resolutions filed without board meetings, in an attempt to comply with the Companies Act.<\/p>\n<p>On April 8, this year, the South Africans directed the company secretary\u2014Kasirye and Byaruhanga Co.\u2014to convene a shareholders\u2019 meeting.<\/p>\n<p>Mr Kashilingi in a rejoinder on April 9 thwarted the efforts on grounds that: \u201cThis meeting would not be in the best interests of the company given that there are pending legal proceedings to determine shareholders and other rights.\u201d<\/p>\n<p>In another email exchange on June 19, 2020, Mr Lafras, who insists on being the rightful company board chairman talked down Mr Kashilingi as \u201cconfused.\u201d<\/p>\n<p>He wrote: \u201cI am the chairman of the board, which you pretend to represent. You do not represent the board. Therefore, everything you have said on behalf of the board, without my consent, is null and void.\u201d<\/p>\n<p>Mr Kashilingi responded: \u201cBut, please, note that no amount of writing is going to reverse what has happened.\u201d<\/p>\n<p>In another December 24, 2020 correspondence to Kasirye and Byaruhanga Co., Mr Lafras wrote: \u201cI also want to know how Alexander (Saleh) became CEO (chief executive officer). As company secretaries, you should have called for the board meeting which appointed him and taken minutes.\u201d<\/p>\n<p>He added: \u201cI do not recognise the management of the company. As such, I can only ask for information from the company generally. This I will do without addressing my request to the \u2018CEO\u2019 who was appointed by a non-functional board.\u201d<\/p>\n<p>People familiar with the fall-out alleged that the company secretary is in cahoots with Ms Saleh, but Mr Enoch Rukidi, a senior partner at the law firm, told this newspaper that the ongoing disagreement is not peculiar.<\/p>\n<p>\u201cAs company secretary, we await the outcome of the petition filed at the URSB to guide us on how to proceed. It has and will always be our policy to follow the law and as such we cannot discuss matters that are before a judicial entity before they are concluded,\u201d Mr Rukidi said.<\/p>\n<p>In email response to our inquires, lawyer Kashilingi said he was constrained to comment on the matter before a judicial body for adjudication.<\/p>\n<p>Turf wars<\/p>\n<p>The crux of the infighting ostensibly started in 2017 when SSL petitioned URSB challenging the new shareholding structure by the South Africans. However, other sources say the fissures emerged around 2009 when Ms Saleh first appeared in the company documents.<\/p>\n<p>For more than a month she did not respond to our inquires for a comment on the matter.<\/p>\n<p>Officially, SSL listed Ms Jovia as company director in a resolution filed with URSB in December 2016.<\/p>\n<p>In a November 2017 correspondence to Mr Gimara to rein in on Kashilingi, Mr Lafras further detailed that Gen Saleh having been board chairman until November 2016 had \u201cgiven his shares to his wife Jovia.\u201d<\/p>\n<p>\u201cI have not been involved with the management of the company until November 2016,\u201d Mr Lafras wrote.<\/p>\n<p>\u201cA new board was chosen with Hussein Kashilingi (who represents approximately 25 percent shareholding owned by Jovia Saleh) being appointed director with myself, and Mr Enoch Rukidi (from Kasirye and Byaruhanga Co.) I was appointed chairman of the board in November 2016,\u201d he wrote.<\/p>\n<p>Documents, however, detail Ms Jovia\u2019s involvement with the company from around 2009. According to minutes of an October 12, 2009 annual general meeting, Ms Saleh attended the sitting, which among others, was convened to consider audited accounts for the year ended February.<\/p>\n<p>During subsequent years, documents and company filings reveal that Ms Saleh started playing a more active role in the company ostensibly on her husband\u2019s behalf.<\/p>\n<p>In June 2012, Gen Saleh expressed intentions to step down as company board chairman on account of \u201cdisappointment\u201d that the \u201coriginal vision\u201d he hoped for the company had not been realised.<\/p>\n<p>He then proposed Mr Lafras as the successor, according to minutes of the extraordinary meeting held at Garuga, Entebbe.<\/p>\n<p>Earlier in 2010, Mr Lafras had deregistered the holding company\u2014SIL\u2014of his majority shareholding in the British Virgin Islands.<\/p>\n<p>The shareholding was re-alloted to Winork Investments Ltd (5 percent) owned by Mr Rukidi, and another 4 percent was sold to John Mugisha, the former SUL managing director who last year elected to retire \u201con medical grounds.\u201d<\/p>\n<p>The remaining SIL\u2019s shareholding was split equally between Mr Lafras and Mr Pelser, each taking 33 percent.<\/p>\n<p>Mr Pelser, documents show, was first involved with SUL in March 2000 when he was appointed as chairman board of directors alongside Mr Lafras, Capt Abbey Mukwaya, another National Resistance Movement historical-cum-presidential adviser and one Gerhard Deventer, who later went on to become the company\u2019s managing director.<\/p>\n<p>Seven years later, in January 2017, Ms Saleh, who represents SSL, kicked up the storm by petitioning URSB challenging the divestiture and new shareholding.<\/p>\n<p>Put simply, SSL argued that the new shareholding structure including by way of increasing share capital by the majority shareholders (formerly SIL), reduces the value of their shares and as such prejudices them &#8212; because their shares are now worth less than what it was before the transfer. SSL then argued that the shareholding reverts to the date specified when the company was incorporated.<\/p>\n<p>Mr Lafras and Mr Pelser, through their lawyers, court documents show, argued that due process was followed and that SSL was adequately consulted before shares were re-allotted and they \u201cdid not object\u201d.<\/p>\n<p>Pending determination of SSL\u2019s petition, a one Jane Okot Langoya, a registrar at URSB, in a letter dated November 14, 2017, issued orders stopping all shareholders\u2019 meetings, but not directors\u2019 meetings.<\/p>\n<p>The registrar also advised the parties to refrain from doing anything outside the law that would jeopardise the interest of the parties.<\/p>\n<p>Winner takes it all<\/p>\n<p>The South Africans, according to correspondences, petitioned the High Court in 2017 to wind up Saracen\u2019s operations, to be bought by SSL at a fair value determined by an agent of court, or dissolve the company.<\/p>\n<p>The duo also alleged prejudicial conduct by the minority shareholders to steal the company from them, the majority shareholders.<\/p>\n<p>However, Justice Lydia Mugambe dismissed their petition and referred them to URSB for their petition to be heard together with another petition filed earlier by SSL.<\/p>\n<p>In a February 14, 2018 correspondence, the South Africans\u2019 lawyer Tom Mbalinda wrote to Ms Saleh, raising red flags that despite his clients being majority shareholders that they had been locked out of management of the company since the dispute started.<\/p>\n<p>\u201cThere are no board or members\u2019 meetings being called, and our client is not availed financial records of the company. This has adversely affected the company as well as our clients\u2019 interests with the other shareholders,\u201d Mr Mbalinda\u2019s letter reads in part.<\/p>\n<p>The letter tabled a proposal to rework another shareholding structure which would effectively bring Mr Lafras\u2019 shares\u2014the only shareholder Ms Saleh recognises\u2014to 66.79 percent, and SSL\u2019s to 33.21 percent in exchange for SSL dropping its URSB petition, and allowing the company to function normally.<\/p>\n<p>It is not clear whether Ms Saleh agreed to the new proposal. But one source intimated that there were discussions on a potential buy-out.<\/p>\n<p>\u201cShe had ridiculous terms and he (Lafras) said no. They could not reach agreement,\u201d the source noted.<\/p>\n<p>Both Mr Lafras and Mr Pelser declined to comment for this story when contacted by email.<\/p>\n<p>In May 2019, URSB\u2019s Langoya issued orders reversing SUL\u2019s shareholding to the time of incorporation in 1995.<\/p>\n<p>She further ordered for appointment of an inspector to look into alleged financial [mis]management of the company, a report which was submitted last year in October.<\/p>\n<p>In the investigation review report by BDO Uganda, described on its website as a \u201ccentrally-managed network of offices\u201d, was \u201cprepared solely for purposes of reporting our findings to SSL\u201d and hence should not be relied upon for any other purpose.<\/p>\n<p>In 2019, Mr Lafras and Mr Pelser appealed the registrar\u2019s ruling on the ownership of the shares in the High Court.<\/p>\n<p>On May 29, 2020, Justice Ssekaana allowed the company\u2019s appeal, and accordingly set aside the URSB\u2019s decision on grounds that \u201cthe affected shareholders had not been given a fair hearing\u201d, and that SSL had not, in its petition, prayed for reversal of shareholding as a remedy.<\/p>\n<p>\u201cThe decision by the learned Deputy Registrar General to transfer shares back to Saracen International even when it is clear at the time that the company Saracen International had been struck off the register at the time of the order is strange,\u201d Justice Ssekaana ruled.<\/p>\n<p>The judge added: \u201cThe order to revert shareholding to a company, which had at the time of the order been struck off the register, is an attempt by the SSL to grab the shares of the appellants and the court should not condone it. The registrar should have factored all the above [considerations] in her mind instead of giving an irrational decision.\u201d<\/p>\n<p>Despite Justice Ssekaana\u2019s verdict, documents show that the deputy registrar has continued to prohibit all company meetings, at least ones attended by the South Africans, on grounds that the issue of shareholding was still in dispute before her.<\/p>\n<p>This compelled Mr Lafras and Mr Pelser to file an application for review of orders before Justice Ssekaana to clarify on his orders and instruct the registrar of companies at URSB to restore the new shareholding.<\/p>\n<p>After submission of filings by both sides, the registrar in a December 4, 2020 correspondence suspended her ruling, pending a second judgement in the application by review by Justice Ssekaana.<\/p>\n<p>In a June 15, 2021 decision, Justice Ssekaana ruled that the application for review did not have any merit, and his earlier orders in the May 2020 ruling still stand.<\/p>\n<p>Our investigations show that URSB is yet to pronounce itself on the matter or comply with Justice Ssekaana\u2019s orders while the minority shareholders, SSL, has allegedly taken over the company, threatening a joint venture partnership between local and foreigners, which also means a lack of mechanism for protection of foreign investors.<\/p>\n<p>Origin<\/p>\n<p>Saracen Uganda Ltd was first registered in September 1995 as a special purpose vehicle owned by Saracen International Ltd (SIL) domiciled in the British Virgin Islands, a famous tax haven, taking 75 percent shareholding, and Special Services Ltd (SSL) holding 25 percent.<\/p>\n<p><b>[email protected]<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Africa-Press &#8211; Uganda. A bitter row pitting Jovia Kyomuhendo, wife of Gen Salim Saleh, and two South African nationals has weighed down one of Uganda\u2019s oldest private security companies, Saracen Uganda Ltd, to the point of dissolution or disintegration. The years-long-running dispute over ownership and control of the company has entangled law firm\u2014Kasirye and Byaruhanga [&hellip;]<\/p>\n","protected":false},"author":84,"featured_media":19749,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,7,8,12],"tags":[233,240,234],"class_list":["post-19750","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-head-lines","category-homepage-english","category-policy","tag-africa-press","tag-africa-press-uganda","tag-uganda"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.1 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Jovia Saleh, foreign investors fight over Saracen - Uganda<\/title>\n<meta name=\"description\" content=\"A bitter row pitting Jovia Kyomuhendo, wife of Gen Salim Saleh, and two South African nationals has weighed down one of ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Jovia Saleh, foreign investors fight over Saracen\" \/>\n<meta property=\"og:description\" content=\"A bitter row pitting Jovia Kyomuhendo, wife of Gen Salim Saleh, and two South African nationals has weighed down one of ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen\" \/>\n<meta property=\"og:site_name\" content=\"Uganda\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2021-10-18T17:08:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2021\/10\/img-616d8dd7e1277.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"720\" \/>\n\t<meta property=\"og:image:height\" content=\"480\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"13 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Jovia Saleh, foreign investors fight over Saracen\",\"datePublished\":\"2021-10-18T17:08:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen\"},\"wordCount\":2584,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2021\/10\/img-616d8dd7e1277.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Uganda\",\"uganda\"],\"articleSection\":[\"all news\",\"head lines\",\"homepage-english\",\"policy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen\",\"url\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/jovia-saleh-foreign-investors-fight-over-saracen\",\"name\":\"Jovia Saleh, foreign investors fight over Saracen - 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