Problematic of liquidation and dissolution of companies under rwandan law: case study of Rwandatel

CHAPTER TWO. ANALYSIS OF PROBLEMS RELATED TO DISSOLUTION AND LIQUIDATION OF COMPANIES IN RWANDA

Upon the dissolution and liquidation of a company, the assets of companies are distributed to its creditors and the surplus is shared by the shareholders proportionally to their respective shares. The company is removed from the register of commerce and it ceases its existence.

In this second chapter, there is analysis of the problems that arise after the company is declared dissolved by the court of law. Normally the forced dissolution cannot be without the insolvency of the company. There are causes which conduct to the bankruptcy of the companies. First, there is enumeration and study of the supervisory bodies which are there to follow daily operations of the companies so that they make the audits in order to assess the financial statements of the company. When those institutions find that the companies don't meet their liabilities anymore, they take some measures in order to protect the interests of the population or any other stakeholder. That is where, it can request the court to start proceedings of companies' insolvency or begin the process of liquidation. As far as the research is concerned, there is assessment of the whole process that conducted to the dissolution and liquidation of Rwandatel Ltd and what is emphasized is the revocation of Rwandatel mobile license by RURA because it is that which led to the judgment on its dissolution and liquidation.

Finally, there is watch out of the impact that the dissolution of Rwandatel had on Rwandan trade, Rwandatel employees and Rwandatel customers. In concluding there is a personal view and general considerations on this case of Rwandatel.

II. 1. Companies' supervisory institutions in Rwanda

In Rwanda, there is no special institution in charge of supervising all companies. Every sector of business has the institution in charge of its supervision. That is there are public institutions which are charge of different things in the society and that in addition to that they have an additional task which is to supervise the companies especially commercial which are linked to that institution. In this section the researcher enumerates some like the National Bank of Rwanda which has the competence given by the law of supervising all banks and financial institutions which operates within the country^78(*). There is also Rwanda Utilities and Regulatory authority, which ensures fair competition, promoting and protecting consumers interests and rights in all regulated sectors, and finally, Rwanda Development Board which is in charge of registering companies as well as remove companies from the register of commerce.

II.1.1. National Bank of Rwanda

The National Bank of Rwanda has been given the mandate to license and supervise banks underthe Central Bank law n° 55/2007 of November 30th 2007 specifically in its articles 53, 56, 57 and58. The legal and regulatory framework for licensing and supervision financial institutions isdetailed in the Banking law n° 007/2008 of June 8th 2008. Furthermore the National Bank of Rwanda licenses and supervises banks in accordance with the core principles for effective Banking suspension (BCP'S) issued by the Basel Committee on Banking Supervision^79(*).

The granting of banking license is discretionary of control in the regulation of the banking sector is when an application is being considered by the licensing authority. Applicants should understand that the proper investigation of their application may take some time and they should plan accordingly.

In addition to that, the National Bank of Rwanda has the sole responsibility for monetary policy and its principal objective is to ensure price stability within the system.^80(*) All financial institutions are subject to supervision and regulation by the NBR under the Banking Law of 199. The institutions that it supervises are commercial banks, micro finance institutions, and the insurance companies.^81(*) Up to now in Rwanda, no bank has been dissolved and liquidated and this is because when the bank is about to be bankruptcy, its shareholders sell it to other investors that have means of recovering its commercial activities.

They are some examples of banks like BCDI which was about to be declared and that was bought by Togolese ECOBANK. Apart from this there are other examples. For banks andinsurance companies, the National Bank of Rwanda has established the minimum amount of capital of investment which is like caution fees that those institutions have to deposit in NBR so that they start operating. So in case they are bankruptcy and that they are liquidated NBR use that sum in reimbursing the creditors. All said above are done by the NBR's department the bank supervision department

For the researcher's point of view, it is good because it is like protecting the Rwandan society against the matters that may arise from the bankruptcy of banks, insurance institutions and other financial institutions. This will make Rwandans trusting the banking institutions because they won't fear that banks will go bankruptcy and that they will lose all their economics. This attracts investors as they will be sure that they can deposit their money in Rwandan banks without sending back their income to their respective countries. This will lead to the development of Rwandan banking sector.

* ⁷⁸ NBR,» About supervision», http://www.bnr.rw/index.php?id=138/ last accessed May 31,2014

* ⁷⁹Ibid.

* ⁸⁰Ibid.

* ⁸¹ A. Ukwishaka,The rationale and impact of Banques Populaires transformation from a cooperative to a commercial bank, www.memoireonline.com/06/10/3610/m-The-rationale-and -impact-of-Banques-Populaires-transformation-from-a-cooperative-to-a-commercial-ban11.html/ last accessed May 31, 2014