Igara Growers Tea Factory holds 28th AGM amid tight security
The board members, initially selected through zonal meetings, were formally confirmed by shareholders in line with sections 163, 164, 165 and 166 of the Companies Act, Cap 106, which vests the appointment of directors and auditors in shareholders
BUSHENYI, June 26, 2026 — Shareholders of Igara Growers Tea Factory Limited [IGTF] have approved a new board of directors to steer the company for the next three years, despite an attempted administrative halt by the Uganda Registration Services Bureau [URSB].
The highly anticipated 28th Annual General Meeting [AGM], which consolidated three delayed assemblies into a single sitting, was held on Thursday at the factory premises in Kyamuhunga, Bushenyi district. Proceedings unfolded under heavy security deployed to prevent a repeat of earlier disruptions that had affected previous meetings.
The board members, initially selected through zonal meetings, were formally confirmed by shareholders in line with sections 163, 164, 165 and 166 of the Companies Act, Cap 106, which vests the appointment of directors and auditors in shareholders.
The new board includes Leonard Beinomugisha [Chairperson, Bitereko zone], Aloysius [Kanunka zone], Emmanuel Muhebwa [Igara zone], Kasapuri Leonidas [Muguma zone], and Eva Banyenzaki as the female representative.
Shareholders also mandated the board to temporarily appoint a sixth member to represent Nyakashaka zone. Confirmation of Ronald Rwankangye was deferred after investigations found that the green leaf he supplied to the factory did not originate from his personal production estate.
Company Secretary Kenneth Mutabaruka explained the background of the decision, noting that the board had suspended Rwankangye in 2023 over concerns that he did not own a production estate at the time of his 2021 election. His subsequent court case was dismissed.
“The proposal is for the board to fill that position temporarily to ensure Nyakashaka zone has representation,” he said.
Cost-cutting and turnaround plan
In his inaugural remarks, newly confirmed chairperson Leonard Beinomugisha outlined an aggressive turnaround strategy focused on cutting administrative costs and boosting tea production.
“We want to revise the cost of production by reducing company expenditure, which will allow profit margins to increase,” he said. “We also want to encourage higher tea production among farmers, because volume will increase income and reduce unit processing costs through economies of scale.”
Beinomugisha said the consolidation of three AGMs into one was necessitated by operational disruptions linked to COVID-19, low international tea prices, high costs, and prolonged court battles involving rival shareholder factions.
“Previously we would hold an AGM annually, but due to poor performance we combined several meetings,” he said. “This meeting was originally scheduled for 17 November 2025 but was postponed due to court cases. It is not illegal, but it is not an ideal situation.”
He added that litigation had significantly strained company resources and delayed governance processes.
Calls to curb litigation
Shareholders criticised what they described as excessive litigation, urging tougher measures against individuals who take the company to court.
Shareholder Savio Tumuramye said repeated legal disputes had pushed the factory close to insolvency.
“People used to be forgiven after losing cases, and that has become a habit,” he said. “We are losing time and money. We should regulate the rate at which disgruntled shareholders take the company to court.”
Beinomugisha agreed that unsuccessful litigants should bear financial responsibility.
“It is easy to go to court but difficult to come out of it,” he said. “Those who sue and lose should pay damages, so it serves as a lesson to others.”
URSB dispute and governance clarification
The chairperson dismissed claims that the AGM defied a directive from URSB, saying the meeting proceeded based on a court ruling lifting earlier orders.
“For us, this meeting was mandated by the court ruling,” he said. “We have never received any letter from URSB stopping the AGM.”
He declined to comment on a petition by some shareholders challenging the legality of the board.
Bailout-linked audit process
Beinomugisha said the company is preparing for inspection by the Office of the Auditor General [OAG] ahead of a government bailout worth Shs 152 billion.
“We received a letter from the Auditor General indicating they will audit the debts before government injects funds,” he said. “We have already submitted our documentation.”
He stressed that shareholder confirmation of the board was critical for the audit process.
“There is no way we could present an unapproved board for a state audit. That is why we urgently held this AGM.”
The bailout is expected to support more than 7,000 smallholder shareholders at Igara and 22 other distressed tea factories nationwide.
Appeal to farmers
Beinomugisha urged farmers not to abandon tea cultivation despite recent sector challenges.
“The future of Ugandan tea remains bright,” he said. “Farmers who have not uprooted their tea should continue, and those with idle land should plant more.”
He also appealed for consistent delivery of green leaf to sustain factory operations.
Regional sector crisis
Guest speaker Grace Kyomugisha, Chairperson of Kayonza Growers Tea Factory, said the challenges facing Igara mirrored a wider regional crisis.
“The economic situation is the same at Kayonza in Kanungu,” she said. “We have faced the same institutional and financial struggles.”
She described severe financial pressures including tax arrears, unpaid wages, and supplier debts, saying survival required strict austerity.
At Kayonza, she said, staff numbers had been reduced by 60 per cent and arrears temporarily suspended to prioritise current operations.
“Running a tea factory in this environment is extremely difficult,” she said, urging government to expedite bailout support.
Farmers’ concerns and financial distress
Shareholders and farmers warned that delays in bailout implementation could trigger further boycotts of green leaf deliveries unless arrears are addressed.
An elderly supplier appealed for patience, noting that many farmers were owed more than some factory workers.
“We must put anger aside so the factory can operate and we can all eventually be paid,” he said.
Financial projections
Finance Committee Chairperson Naboth Nuwagaba said IGTF is projected to process 36 million kilograms of green leaf in 2026, split equally between Igara and Buhweju smallholder bases.
At a purchase price of Shs 350 per kilogramme, projected revenues are estimated at Shs 35.39 billion, with a gross profit of Shs 11.21 billion, contingent on the state stabilisation fund.
Community impact and outlook
Kyamuhunga Town Council Mayor Moses Bikanya warned that prolonged price declines and governance disputes had deepened poverty, increased school dropouts, and strained local financial institutions.
He said many borrowers had defaulted on loans, with some fleeing due to financial distress.
Despite tensions, the meeting ended on a cautiously optimistic note, with shareholders expressing hope that the anticipated bailout would stabilise operations and restore farmer incomes.
Founded in 1969, Igara Growers Tea Factory Limited remains one of south-western Uganda’s key agricultural enterprises, supporting thousands of smallholder tea farmers across Bushenyi, Buhweju and Sheema districts.
https://thecooperator.news/leadership-row-deepens-as-ursb-halts-igara-growers-tea-factory-agm/
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