Suit against Igara Tea Growers’ leaders dismissed, costs awarded against petitioners
BUSHENYI, May 26, 2026 — The High Court in Bushenyi has dismissed a petition filed against the Board of Directors of Igara Growers Tea Factory Limited [IGTF], with costs awarded against the applicants.
Delivering the ruling days ago, Justice Amos Kwizera held that the petitioners, mostly, smallholder tea farmers/shareholders, had failed to exhaust the available administrative remedies before seeking court intervention.
He said the complainants should first have presented their grievances to the Registrar of Companies.
“The petition is incompetent; therefore, this application is dismissed with costs,” Justice Kwizera ruled recently. “As a consequence, Miscellaneous Application No. 14 of 2026 cannot stand independently and is also dismissed. Furthermore, the interim order previously granted by the Civil Division of the High Court in Kampala is hereby vacated.”
The case, filed on October 18, 2025, challenged the legality of the existing Board of Directors, alleging financial mismanagement, heavy indebtedness, and the blocking of an elective Annual General Meeting [AGM] intended to usher in a new board.
Justice Kwizera explained that Section 243[1] of the Companies Act mandates the Registrar of Companies to handle internal company disputes of such nature.
“It is clear that this matter should have been referred to the Registrar rather than coming to waste the court’s time,” the judge noted. “This is an urgent matter, as evidenced by the packed courtroom. I implore parties in future to utilise the Registrar’s office and only approach the High Court on appeal.”
The court subsequently dismissed Nshumbusha Richard versus Igara Growers Tea Company [Company Cause No. 1 of 2025] together with its accompanying Miscellaneous Application No. 14 of 2026.
The latest legal dispute follows the expiry of the outgoing Board of Directors’ term and comes amid years of internal wrangling, allegations of financial mismanagement, and mounting debts said to be threatening the factory’s operations and the livelihoods of thousands of smallholder farmers in Bushenyi District.
Counsel Calvin Baryeruka, representing the aggrieved shareholders, urged calm as the petitioners review the ruling, noting that an appeal remains a likely option.
“In principle, we must respect court decisions even when we strongly disagree with them,” Baryeruka said. “However, the court bypassed the core grievances of our clients. The major issues of corporate governance and unfair management were never substantively heard or addressed. While we disagree with the judge’s reliance on strict technicalities, prudence requires us to first examine the written ruling before determining our next course of action.”
Baryeruka added that the petition was intended to scrutinise the factory’s operations in order to protect the interests of its estimated 7,000 shareholders.
The dismissal has since triggered anger and frustration among smallholder farmers, many of whom say they are trapped in a bureaucratic cycle between the judiciary and the Uganda Registration Services Bureau [URSB].
“We are deeply disappointed,” shareholder Ronald Monday said while appealing for executive intervention. “The court has dismissed the case on a technicality, effectively allowing an expired board accused of financial impropriety to retain operational control. If the courts cannot resolve this matter, we ask the President to intervene because local leadership has failed us.”
Another shareholder, Brian Tumwiine, expressed frustration over what he described as contradictory guidance from authorities.
“The Registrar of Companies directed us to court, and now the court is referring us back to the Registrar. It feels like our livelihoods are being treated as a game,” Tumwiine said. “The factory has defaulted on payments for our tea leaves, and when we attempted to attend the last AGM, it was called off and police dispersed us.”
Primary petitioner Julius Mutahunga warned that the unresolved leadership crisis could escalate into political agitation.
“The ruling leaves the status quo intact while ignoring the breakdown in governance,” Mutahunga said. “As shareholders, we cannot allow individuals to manipulate systems and run down our factory. We are either going to appeal or pursue political action through demonstrations.”
The economic strain caused by delayed payments for tea deliveries is reportedly worsening conditions for many households across greater Bushenyi, with families struggling to meet basic needs such as school fees and food expenses.
“We are desperate,” one female shareholder lamented. “The tea factory is our main source of income. Right now, the cost of living is high, we have no money, and our cash crop is failing us. We appeal to State House to help revive the business.”
Another shareholder, Janet Bampenda, accused the management of presiding over systemic operational failures.
“They take our tea leaves and fail to pay us,” Bampenda said. “The factory is breaking down mechanically because of poor leadership, and we are left stranded.”
Some shareholders further alleged that revenues from tea sales at the Mombasa auction are being diverted for personal gain instead of compensating local producers.
As a result, the smallholder farmers are now calling on President Yoweri Museveni to halt the release of a Shs 312 billion presidential bailout pledged during the August 2025 campaigns until the leadership dispute is resolved.
The proposed rescue package reportedly includes Shs46 billion in direct support to farmers, Shs149 billion for factory owners, and Shs112 billion intended to clear outstanding arrears owed to tea nursery operators.
“If the government releases that money now, it will simply be consumed by a few well-connected individuals while the 7,000 farmers remain poor,” one shareholder cautioned.
Willis Bashasha, an Igara shareholder and Director of the NRM Manifesto Implementation Unit, currently heads an interim committee formed by disgruntled farmers.
He criticised the High Court for focusing on procedural technicalities while overlooking the underlying governance concerns.
“The court concentrated purely on technical procedures and avoided the substantive issues of board illegality and financial mismanagement,” Bashasha argued. “Our biggest appeal was for the court to direct the regulator to convene an AGM so that shareholders could elect legitimate leaders and save the company.”
Bashasha warned that the ruling leaves the multi-billion-shilling company in a state of uncertainty.
“The factory is barely operational, suppliers and farmers remain unpaid, and URSB had already indicated that the company lacks a legitimate board,” he said. “Who now has the authority to convene an AGM? If legal remedies have failed, we must pursue political interventions and seek a lasting solution from the President.”
However, incumbent Board Chairperson Sam Muhereza Karumira welcomed the ruling, describing it as a victory for institutional stability while extending an olive branch to dissenting shareholders.
“Igara Growers Tea Factory is bigger and older than all of us,” Muhereza said. “The court has affirmed that my term remains valid. Let us put aside hostility, reunite, and focus on production. When my tenure ends, a new board will be elected to continue the work.”
Established in 1969, Igara Growers Tea Factory Limited remains a key economic pillar in south-western Uganda, supporting the livelihoods of thousands of smallholder farmers across Bushenyi, Buhweju, and Sheema districts. It was established as part of the governments’ effort to reduce poverty in the 1960’s.
Government by an act of Parliament established Uganda Tea Growers Corporation [UTGC] in 1966 to take care of the interests of smallholder tea farmers in Uganda and as their green leaf production increased UTGC put up Igara as one of the four smallholder tea factories in Uganda to process leaf obtained from Bushenyi district.
During the 1970’s political instability led to a decline in the entire tea industry and this almost brought Igara to a close as the factory was deprived of all essential inputs required to run it and vast amounts of tea fields were abandoned.
In 1989, a European Union funded ten-year tea rehabilitation project in the small holder tea sub sector started. The project covered the rehabilitation of farmers’ gardens as well as the processing factories. As part of governments’ overall divestiture programme, Igara and indeed the other three smallholder tea factories of Mabale, Mpanga, and Kayonza growers were privatised and sold to the smallholder tea farmers in the respective areas. The process started in 1995 and was completed in 2000 when full small holder ownership was attained
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