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Commonwealth Summit Controversy

Hotel partnership a thorn in Ugandan government’s side

Wolfgang H. Thome, eTN Africa  Sep 11, 2009

In what now appears to have been hasty arrangements to enter into a partnership between government and a privately owned hotel company ahead of the Commonwealth Summit in late 2007, problems have of late emerged when government wanted to divest of its shareholding in the Commonwealth Resort Munyonyo.

Open questions of access by the government’s own auditor general department to the books of the resort remain unanswered, and extra construction work added to the initial scope, like more parking, an access road and a marina facility, have been criticized by parliamentarians and the media, sections of which have developed a hype and frenzy over the contracts.

Whichever the case, the “normal” Company Act now applies, and the relations between the shareholders, i.e. government and the individual, are governed by the company’s Memorandum and Articles of Association, which prescribe specifically how disposing or selling of shares has to proceed.

What appears clear is that government did not engage competent consultants to guide them through the partnership process at the time, probably caused by the limited time available to get the financing into place and the construction completed in time for the summit, which in fact was achieved just in the nick of time.

However, the questions parliamentary committees and individual members of parliament are now asking need answers, inconvenient as it may be for those who put their signatures to the contracts at the time.

On the positive side, the Company Act provides for whatever cause of action government wishes to pursue in divesting of its shares, as does the Memorandum and Articles of Association, and as an ultimate solution the matter could go to the Commercial Court in Kampala.

Meanwhile, however, Uganda has a world class meeting and resort facility at the shores of Lake Victoria, which has done the country proud many times over since CHOGM 2007 and has made significant contributions to attract conferences, meetings and conventions to the country.

Hotel partnership a thorn in Ugandan government’s side

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