The Commercial Court in Kigali is expected to adjudicate in a highly contentious business dispute between shareholders of Refad Rwanda Ltd Company.
The shareholders in this Refad company include Jacques Ntogue with a 49% stake, while Omnicane a Mauritanian sugar-sector giant controls 51% of shares.
“I was the founder and Chairman of Refad Rwanda. With the majority shareholding. When Omnicane came in they got 51% and committed to invest U$3Million Equity in the project. We have never seen that,” Ntogue told Taarifa in an exclusive interview on Tuesday.
Refad company is currently managing construction of two hydroelectric dams in southwest Rwanda.
However, these shareholders have not been in good business relations as Ntogue accuses Omnicane of fraud, attempting to sideline him in the hydroelectric dam project. He has chosen to drag his partner to the Kigali commercial court accusing Omnicane of forgery to steal his shares in the Refad company.
In 2019, there was a sudden increase in the capital of Refad company and this happened without the knowledge of Ntogue but later learnt in 2020 that his shares in the company had been stolen or diluted or even chopped from 49% to a very shy figure of 1.52%.
For any Business person such an action would not just be left to pass. Ntogue quickly swung into action and filed a complaint in the commercial court but also appealed to Rwanda Development Board.
A dissatisfied Ntogue badly wanted the capital increase annulled.
In its argument, Omnicane argues that it took an equity stake in Refad in December 2014 and argues that Ntogue had never paid the equivalent of U$ 3million he should have done for his shares.
“This is not true. When Omnicane came, I had already secured; feasibility study, Environmental study, land acess and land rights- all this work took at least 5 years and was paid for from Jacques Ntogue pocket,” according to his lawyer Isaac Ndahiro.
Ndahiro further explains that Omnicane made 3 due deligence missions in Kigali, met 3 minister, EWSA directors and apointed a Swiss company Stuky that validated technical and financial studies. There was no mention that Refad Rwanda will inject an extra U$3million and give 51% share to Omnicane.
Meanwhile, in November 2019, Omnicane offered to Jacques Ntogue to buy 49% share for €uro600,000. Ntogue rejected that and instead offered to buy 51% of Omnicane for €uro 3million.
However, Ntogue previously told Africa Intelligence that this amount corresponds to the sum the firm spent on feasibility and environmental impact assessments before Omnicane came on board.
In a nutshell, Ntogue told Taarifa that Omnicane refused to follow RDB guidelines when RDB realised the Fraud.
“The capital increase not only was a fraud, but it never happened since with 49% of shares we were never informed about this capital increase,” Ntogue said.
In another submission, Ntogue says that Omnicane with a local accomplice has organised a tax evasion by a fabricated loan to the local company- a loan that has no evidence nor trace, “This is pure fraud.”
According to Ntogue, all these major operations should have requested a board meeting followed by a shareholders meeting, “None of these meetings took place.”
Since the matter is already in the courts of law, “we request that the court request an independent audit. To know what has happened since we have being asking for 5 years to get company financial data. And that the court follows RDB request to give us back our 49% shares.”
Below are details of a letter written by RDB’s Registrar General Richard Kayibanda and addressed to Dieudonne Nzafashwanayo of ENSAfrica, Ref: RDB/3/RG/1735/11/2020. Copied on this letter include; Shield Associates, Omnicane Ltd and Omnihydro.
Reference is made to your letter of 25 september 2020 where you requested the Registrar General to reconsider the decision to rescind the approval of the change filed by REFAD RWANDA LTD in the office of the Registrar General since June7, 2019 as detailed in the letter addressed to OMNIHYDRO Ltd (your client) on September 16, 2020.
As we informed your client in the letter of September 16, 2020, the rescission of the approval of the filed changes in REFAD was based on the provisions of the articles 191 and 194 of the law no17/2018 of 13/04/2018 governing companies.
The reading of the two articles makes it clear that notwithstanding anything a company’s incorporation documents (in this case the clause 12 (I) of the articles of Association of REFAD RWANDA Ltd adopted on May 8, 2020), no action may be taken by a company which affects, “the rights, privileges, limitations and conditions attached to the share by this law of the incorporation documents, including any voting rights and rights to distributions attached to the share” unless that action has been authorised by a special resolution of each class.
This indicates that the provisions of the articles of association of Refad affecting Refad Group AG right to vote cannot be exercised if not taken by a shareholders’ special resolution in which at least 75% of shares (as registered by then in the registry of companies) are represented.
Please note that when the decision which affected Refad Group AG voting right was taken, the latter had 75 ordinary shares representing 49% of the total shares. This means that in this situation it was not possible to take a special resolution in its absence.
From the above we would like to inform you that the decision rescinding the approval of the filed changes in Refad Rwanda ltd/ Omnihydro Ltd as communicated to the latter on September 16, 2020 remains unchanged.
we also take this opportunity to remind Omnihydro ltd to restore the company records in the registry in their status as initially requested in our letter of September 16, 2020 immediately upon receipt of this letter, failure of which, it shall be effected by our office.
This is a developing story, Taarifa will bring you extra details in a series