Can the RDB still ensure the protection of foreign investments in Rwanda?

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The Rwanda Development Board may not have foreseen a nasty dispute of such magnitude between two foreign investors operating on Rwandan territory.

The dispute that emanates from a shareholder accusing his partner of stealing shares in broad daylight is a case that is fading before the young commercial law of the country.

Refad Group AG and Omnicane Ltd are both shareholders of Omnihydro Ltd formerly Refad Rwanda Ltd. The initial capital structure was 51% Omnicane 49% REFAD Group AG.

However, something strange happened, the capital structure was altered and later Refad Group AG realized that its shares in the company had been drastically reduced to just 1.52%.

According to the representative of Refad Group AG, Dr Jacques Ntogue, a Franco-Cameroonian entrepreneur, there has never been a board of directors or a shareholders’ meeting to review the capital structure.

The Rwanda Development Board has been contacted twice to use its powers and mandate (which it has) to settle this corporate dispute. RDB had ordered the restoration of the original capital structure, but his orders were ignored.

Dr Ntogue took the case to the Rwanda Commercial Court and no hearing date has been set. “They (the court) continue to extend the date by calling for an obligation to comply with measures to prevent the spread of Covid-19.”

Taarifa contacted Omnicane earlier this week from his home in Mauritius. Omnicane did not respond directly to Taarifa’s emails but preferred to respond via a sponsored presser via The New Times Publication.

“Legal action has been filed by Refad Group AG, one of Omnihydro’s shareholders. We are currently awaiting a hearing on the case which has been delayed, ”Omnicane said in a statement.

The press release adds: “The legal case concerns the challenge of certain company decisions regarding capital increases. It should be noted that all shareholders have been made aware of the increase in share capital. The directors representing all the shareholders were duly present at the meetings of the board of directors authorizing the increase of the share capital, and this action was approved by the shareholder (s) of Omnihydro in accordance with its articles of association and company law. All the shareholders were able to subscribe to the new shares in proportion to their existing shareholders.

“This case has nothing to do with operational issues. This can be substantiated by the fact that the urgent request for interim measures lodged by REFAD Group AG was rejected by the commercial court, ”said Omnicane.

However, Dr Ntogue in response to Omnicane’s statement, “This article (published in The New Times) is full of lies,” he said without further details.

Clare Akamanzi, CEO of RDB, told Taarifa in an email Friday that “it is important to await the outcome of the legal process and to avoid any undue influence on the judgment of such cases.”

“Since the case has been referred to the courts by the shareholders, RDB cannot prevent the shareholders from exercising their rights of civil action. In civil proceedings, any request for an interim order in a matter that is the subject of the main case pending before the court must be submitted to the same court for consideration, ”Akamanzi said.

Although the case is still pending in court, Dr Ntogue is once again angry accusing Omnicane of seeking a loan and doing other business before the court rules on the dispute.

“Whenever an energy project is underway, it is not allowed to apply for funding. But here we are and Omnicane has requested a loan from an unidentified bank, ”Dr Ntogue told Taarifa.

He said that this money would be supposed to be injected into the same power project that is already operational.

“How can Omnicane dare to apply for a loan without a board meeting, board resolution, shareholder meetings… .. All this while we are in court and we are waiting for our case (which continues to be delayed) be tried, ”wondered Dr. Ntogue.

According to RDB’s Akamanzi, “RDB is not aware of any information regarding any of the shareholders requesting a bank loan. We have not received any mortgage registration requests or other documents relating to this alleged transaction.

This project according to independent experts (expert www. Stucky.com) should cost no more than $ 12 million.

“With all the fakes, loans and capital increases, we are above US $ 30 million. Since Omnicane is getting a loan for himself, this is just a way to squeeze some money out. money to the business and to avoid paying taxes on the business, ”Dr Ntogue told Taarifa.

Mauritian company Omnicane ignores Rwandan court and RDB directives

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