A deepening governance and financial crisis at Igara Growers Tea Factory Limited have triggered a formal investigation after more than 380 shareholders accused the Board and management of presiding over unlawful administration, flawed elections, and serious financial mismanagement.In a ruling on Company Application No. 44441 of 2026, Assistant Registrar of Companies Daniel Nasasira directed an independent inquiry into the affairs of the public company, which is owned by over 7,000 tea‑farmer members in South‑Western Uganda.The complainants – shareholders Batangaya Asuman, Bashaasha Willis, Ronald Rwankanji, Hannington Katarikawe, and Agaba Turikwendera Godfrey – argued that the Company has operated without a lawfully constituted Board since August 2025.They cited an Extraordinary General Meeting of 31 January 2025, where a special resolution allegedly limited the then Board’s mandate to August 2025, pending combined Annual General Meetings for the years 2022, 2023, and 2024.The shareholders contended that despite this, the Company Secretary proceeded to organise Board elections and Annual General Meetings in a manner they say breached the Company’s Amended Articles of Association.The dispute centres on the vetting and election of new directors. The Applicants challenged the validity of the Vetting Committee that, in August 2025, cleared candidates and declared five “Directors Elect” pending confirmation by the Annual General Meeting of 17 October 2025.They alleged that the then Board Chairperson, Samuel Muhereza, improperly presided over the Vetting Committee contrary to Article 81, despite being a retiring director, and that the Zone Chairpersons on the Committee had themselves overstayed their mandates.Concerns were also raised over the authenticity of academic qualifications submitted by one candidate, Twesigye John, with letters from two secondary schools allegedly failing to verify the documents.The shareholders further claimed that the 17 October 2025 Annual General Meeting collapsed after the outgoing Chairperson dispersed the meeting, allegedly misrepresenting the effect of an interim High Court order that had temporarily restrained the installation of the purportedly elected directors. Proceedings before the High Court were later dismissed on procedural grounds, with the court advising that the issues were better handled by the Registrar of Companies.According to the Applicants, the Uganda Registration Services Bureau had already acknowledged in earlier pleadings that the Board’s mandate expired in August 2025. Beyond governance, the shareholders painted a grim picture of Igara’s finances.They alleged that staff at the factories in Igara and Buhweju went unpaid for around seven months, leaving salary arrears of about UGX 1.4 billion. They claimed that statutory deductions to the National Social Security Fund (NSSF) of roughly UGX 1.7 billion were not remitted, and that contributions deducted for a staff Savings and Credit Cooperative Society were also withheld. Farmer out‑growers, they said, were owed about UGX 6 billion for green leaf already processed and sold through the Mombasa tea auction. In total, they estimated the Company’s indebtedness at about UGX 21.1 billion, including tax arrears, unpaid NSSF, salary arrears, and debts to farmers, suppliers, and financial institutions. Testimony from witnesses sought to underline the alleged human impact. Shareholder and former director Ronald Rwankanji told the Registrar he had served on the Board since 2021 and was familiar with the Company’s 2017 Articles of Association.Long‑time shareholder and farmer‑supplier Bashaasha Willis said he participated in the disputed Board elections and later petitioned the Registrar after failing to secure a seat. He also claimed the Company owed him approximately UGX 29 million for tea supplied since 2023.Factory workers Natukunda Winnie and Mbendiho John described modest salaries and regular deductions for tax, NSSF, and SACCO savings which they said were not remitted, even as salaries fell into arrears. On the basis of these grievances, the Applicants invoked Sections 169 and 170(b) of the Companies Act, Cap. 106, and sought declarations that the Board’s mandate had expired, an order restraining individuals from acting as directors, the convening of a lawful general meeting, the rejection of filings arising from disputed processes, and the appointment of inspectors to investigate the Company’s affairs.The Respondent, represented by KTA Advocates, denied any irregularity in the vetting and election of directors, insisting the process was transparent and compliant with the Articles. They raised preliminary objections, saying the Company had a “reasonable apprehension” about the impartiality of the Registrar, that there was a pending suit against the Uganda Registration Services Bureau touching on similar issues, and that the Annual General Meeting held on 24 June 2026 rendered much of the complaint moot. They also argued that any allegations of fraud lay outside the Registrar’s administrative jurisdiction. The Company’s lawyers further attacked the Applicants’ credibility, claiming they were not acting in good faith. They alleged that some complainants were indebted to the Company or had questionable standing, including claims that one Applicant was not a registered shareholder, another previously lost his Board seat over alleged unauthentic academic qualifications, and another had been suspended from the Board in 2024.While the Respondent initially expressed willingness to cooperate with the Registrar, its lawyers and contested Board members later walked out of the hearing, accusing the Registrar of lacking neutrality.In his ruling, Assistant Registrar Nasasira acknowledged the gravity of the governance vacuum created when the Board’s mandate lapsed. “I am mindful of the genuinely precarious governance situation in which the Company found itself following the expiry of the Board’s mandate in August 2025. The practical difficulties confronting the Company at that juncture were real and significant,” he observed. On the financial allegations, he pointed to the contradiction between ongoing tea sales and mounting unpaid obligations. “The juxtaposition of continuing revenue receipts with the systematic failure to meet statutory, contractual, and fiduciary obligations raises serious questions about the application and management of those proceeds that cannot be answered without a thorough and independent investigation,” he stated.He added that the Respondent’s reliance on a proposed Government bailout and a special audit by the Auditor General was “more supportive of than contradictory to the case for investigation.” Concluding that the threshold for intervention under the Companies Act had been met, the Registrar held that, “All these allegations constitute circumstances that, taken together, reasonably suggest that the affairs of the Company have been and are being conducted in a manner that is at minimum unlawful and potentially oppressive to its members within the meaning of Section 170(b) of the Companies Act, Cap. 106.”An independent inspection of Igara Growers Tea Factory’s affairs is now expected to scrutinise both its governance and finances, with thousands of shareholders and employees keenly awaiting the outcome.The post Igara Tea Factory Under Probe Over Money and Governance Issues appeared first on Business Focus.