Justice Simon Peter Kinobe of the Civil Division of the High Court has lifted the corporate veil and allowed city lawyer Jackson Ntwatwa to recover his money from troubled tycoon Hamid Mohammed the proprietor of struggling Aya Investments Uganda Limited.
The judge based on the evidence in form of an affidavit provided to court by Martha Nimurungi Kamuhanda from the legal department of Equity Bank who told court that when her bank was served with a garnishee on 29.5.2024 ordering them to attend court on 5.6.2024 at 11:00am and show cause why a garnishee order nisi should not be made absolute, on the same date of 29.5.2024, at exactly 2:23pm, Aya Flour Mills Ltd, a company owned by tycoon Hamid withdrew ShS1,032bn from their Uganda Shillings account and USD 800 from their USD Account.
She proved her statements with evidence of a bank statement which showed that the money was withdrawn by Hamid himself. Her statement connected with Ntwatwa’s statement that the tycoon has been using his company to avoid paying his money amounting to over Shs300m.
The judge further cited the evidence showing that when Hamid learnt that Ntwatwa was planning to attach his motor vehicles, he changed their number plates. He changed UBC 371A to Motor Vehicle Reg. No. UBB 561L whose log book indicates that it’s category of ownership is “Company” (not individual)
More Read
“Hamid who does not deny these facts simply hinges this on the fact that the execution of civil suit No. 136 of 2014 failed miserably because Ntwatwa sought to carry out an execution against the movable properties of Hamid, that is the motor vehicle yet he was never a party to civil suit No. 136 of 2014,” the ruling reads in part.
The judge noted that Hamid’s explanations were deliberate acts of wrongdoing contrary to his claim that there is no overwhelming evidence of fraud perpetrated by the Directors or members of Aya Investments (U) Ltd to warrant lifting of the corporate veil.
The judge agreed with Ntwatwa that Hamid as one of the directors of Aya, fraudulently registered all the assets of the company in his names which made it difficulty to attach the company’s properties to pay himself.
He insisted that the tycoon abused the corporate protection laws and this protection should be lifted from him.
“I am satisfied that all the grounds have been satisfied by the applicant and accordingly lift the corporate veil. This application hereby succeeds with costs to the applicant,” the judge ruled.
According to Court documents, in 2014, Ntwatwa instituted a lawsuit against Aya Investments Uganda Limited after being dismissed from work as a result of the injuries he got during the course of doing the company’s work and he was not compensated.
Court awarded him Shs150m as compensation, punitive damages of Shs50m jointly with interest of 15% per annum from the date the judgment was made in 2014 till payment of the amount in full.
Ntwatwa claims that he has tried to make several attempts to execute orders against Aya Investments by way of garnishee but he has not been successful since Aya Investments transferred all funds from its accounts to another company in the name of Aya Flour Mills SMC Limited owned by Hamid.
