Igara Tea Factory Board Barred from Conducting Company Business Pending Court Decision

The Board of Igara Growers Tea Factory Limited has been barred from conducting company business pending the determination of a High Court case challenging its legitimacy. The directive, issued by the Uganda Registration Services Bureau (URSB), requires individuals whose authority as directors is under dispute to refrain from conducting company affairs or filing resolutions, returns or other company documents with the registry until the court pronounces itself on the matter.

In a ruling dated July 10, 2026, Assistant Registrar of Companies Daniel Nasasira also dismissed attempts to convene general meetings by persons whose mandate has expired and whose authority remains contested, saying such actions should instead follow the procedures provided under Section 138 of the Companies Act. The latest directive follows an earlier decision by URSB in June stopping the company from holding its Annual General Meeting that had been scheduled for June 24 after receiving a petition challenging the legitimacy of the current board. 

At the time, the Bureau said maintaining the status quo was necessary to safeguard the integrity of the ongoing proceedings. The petition was filed by shareholders Asuman Batangaya, Willis Bashaasha, Ronald Rwankanji, Godfrey Agaba Turikwendera and Hannington Katarikawe, with the support of more than 382 shareholders holding a combined 117,869 shares in the company. The shareholders argue that the company’s governance has been undermined by disputed elections, the expiry of the board’s mandate and alleged financial and administrative mismanagement that has negatively affected employees, tea farmers and the company’s operations. 

According to the petitioners, an Extraordinary General Meeting held on January 31, 2025 resolved that the then board would continue managing the company only until August 2025, when the outstanding Annual General Meetings for 2022, 2023 and 2024 were expected to be held. They argue that the board’s mandate therefore expired on August 31, 2025. The petitioners further contend that the subsequent process of vetting and declaring directors-elect was unconstitutional because the Vetting Committee was improperly constituted under the company’s 2017 Amended Articles of Association. 

They allege that the then Board Chairperson, Samuel Muhereza, unlawfully chaired the committee despite being due for retirement, while several zone chairpersons who participated had already completed their terms of office. The dispute is also before the High Court following a case filed in October 2025 by company member Richard Nshumbusha, who challenged the management of the company’s affairs. The court issued a temporary injunction stopping the installation of the disputed directors before transferring the matter to the High Court in Bushenyi, where it was consolidated with an application involving the Registrar of Companies.

The shareholders also allege that the prolonged leadership dispute has contributed to serious financial challenges, including salary arrears of about Shs1.4 billion owed to employees, unremitted National Social Security Fund (NSSF) contributions amounting to about Shs1.7 billion, unpaid Savings and Credit Cooperative deductions, and more than Shs6 billion allegedly owed to tea out-growers for green leaf supplied to the factory. In his ruling, Nasasira dismissed the preliminary objections raised by Igara Growers Tea Factory Limited and referred the governance dispute to the High Court under Section 138 of the Companies Act. He further directed that implementation of any order appointing inspectors under Sections 169 and 170 of the Act be deferred until the court determines the lawful constitution of the board.

The Assistant Registrar ordered that each party bears its own costs, noting that the matter concerns the governance of a public company. Igara Growers Tea Factory Limited, established in 1969, is owned by more than 7,000 tea farmers drawn from five operational zones in the greater Bushenyi area.