By Samuel Sanya
All has been well at the Development Finance Company of Uganda (dfcu) Bank for the past year.
However, a report titled “The Jubilee ESOP independent shareholders report”, which has been circulated to the Capital Markets Authority, the Uganda Securities Exchange and dfcu shareholders is set to cause some commotion.
Augustine Sentamu, Mayanja Zaaly’embikke and Andrew Muhimbise claim that the dfcu board of directors is acting in ways that are aimed to undermine minority shareholders.
They allege that a likely bonus issue and an Employee Share Ownership Plan (ESOP) are part of wider measures to dilute the shares of the bank and hand more power to the major shareholders.
dfcu underwent shareholder restructuring in 2013 with the Dutch Rabo Bank taking up 27.54% and UK Commonwealth Development Corporation (CDC) retaining a 15% stake.
CDC recently signed a $10m (about sh26b) long- term loan with dfcu to enhance small business lending and to grow its rural reach. The authors of the report claim that the 1,399,089 shares available to high level employers under the ESOP scheme are being handled suspiciously and could be a loophole to frustrate minority shareholders.
The shares are meant to increase retirement assets for employees, increase key staff retention and deliver outstanding shareholder value.
Sentamu, Zaaly’embikke and Muhimbise point out that at least seven bank staff and some members of the dfcu board have left for other companies in the recent past despite high remunerations, noting that this indicates a deeper internal issue that the ESOP may not solve.
“In straight forward declaration our current CEO is underhandedly hostile to ambitious staff in senior management (critical staff) capable of rising to the very top and covertly purges them out as a way to ward off com - petition.
“The ESOP shares represent 0.5% of the company’s shareholding, in cash terms in reference to the current market price that’s about sh1.4b,” the trio note in the report.
“Is it, therefore, wise to throw shares as a retention tool without addressing such internal management succession intrigue?” they ask.
They plan to table the report at the meeting. The market traded shares worth sh336m on Tuesday, with most trades, 830,748 worth sh304m, being closed on the Umeme counter.
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