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

II.4.JUDGEMENT OF RWANDATEL

In the case Rcom 0175/011/TC/Nyge of 18/07/2011, Nyarugenge Commercial Court based in Kigali has decided the trial in which the Registrar General of Companies who was represented by Me MBONERA Theophile Vs Rwandatel Ltd which was represented by Me RUBASHA Herbert, Me KAYIHURA Didas and Me Bugingo John Bosco. In the same trial, MTN Rwandacell was the intervening party and was represented by Me NIZEYIMANA Boniface. The object was the insolvency of Rwandatel Ltd.^115(*)

II.4.1 Facts

The registrar general brought an action to court, requesting of the beginning of proceedings of insolvency of Rwandatel arguing that it was no longer able to meet its liabilities and to pay its debts. She was basing on its 2010 financial statement. She requested that meantime the court should appoint the acting administrator of Rwandatel. The court appointed the temporary administrator. He has been given the duty of assessing on behalf of the court whether the assets of Rwandatel S.A should be sold or if there is hope that it can continue operating. He was requested to present a report. The temporary administratorpresented to the court the requested report and explained it in the hearings of 05/07/2011.^116(*)

During the preliminary hearing, Rwandatel counsels objected in requesting that the claim shouldn't be admissible because in the agreement between LAP GreenN and the government of Rwanda, they agreed that matters which may be raised shall be solved consensually and if not to be solved by the arbitrators. They also said that there is an administrative action that Randatel brought to the High Court in requesting the removal of RURA decision of prohibiting Rwandatel from having mobile license. They said that it should be taken into consideration because RURA based on that decision in requesting RDB to bring an action to court asking for opening of proceedings of Rwandatel insolvency. The court decided that the objections of Rwandatel have no merit because the object is the insolvency of Rwandatel and not the agreement between LAP GreenN and the government of Rwanda, and that there is no law which states that the administrative case in which RWANDATEL LTD sued RURA may stop the hearing of the commercial court.^117(*)

MTN RWANDACELL argued that the reason it is requesting the opening of proceedings of insolvency is that Rwandatel Ltd is owing it the debt of 1 841 652 372 RWF and that it has no means of reimbursing it because the former's business assets was based on mobile telecommunication that has been removed of. MTN RWANDACELL was requesting the court that it should be added in the committee of creditors basing on the articles 14 and 15 of the Law N. 12/2008 of 26/05/2009 relating to relating to commercial recovery and settling of issues arising from insolvency.

Rwandatel Ltd councils said that it had means of reimbursing its debts because its capital increased from 2 420 000 000 RWF up to 56 000 000 000RWF as it showed by members of Rwandatel board of directors Ltd of 21/12/2009, and that 21 510 509 000 would be paid. They continued saying that the financial statement proves that there is an increase of property of 2 242 494 000 RWF in 2010. They based on the article 352 and 353 of the Law N. 07/2009 of 27/04/2009, they were arguing that the complainants are not showing those whom Rwandatel failed to reimburse, and that they are no judgments decided by courts ordering it to pay and that it failed. Basing on article 17 of the Law N. 12/2009 0f 26/05/2009 relating to relating to commercial recovery and settling of issues arising from insolvency. They said that there is no due debt failed to be paid the complainants issued; and that the complainant does not show evidences proving that Rwandatel failed to pay. They were requesting that the court should not allow the proceedings of insolvency.^118(*)

The report of the temporary administrator revealed that from 2008 Rwandatel Ltd was working in bankruptcy. The report showed that from 2008 it lost 4 784 860 684 RWF, in 2009, it lost 7 012 762 229 RWF, in 2010 lost 9 959 708 462 RWF. The report showed that in 1/2011 Rwandatel Ltd lost 685 098 758, in 2/2011 it lost 701 558 131RWF, in 3/2011 it lost 591 845 421 RWF, in 4/2011 it lost 625 428RWF, in 5/2011 it lost 248 936 195RWF. It also showed the income of Rwandatel cannot pay its expenditure as he was showing that in 2011 during five months, the income is 2 773 235 455RWF, the dispenses in those five months are estimated to 5 626 102 591RWF. That is, Rwandatel has a loss of 2 852 867 136RWF during that period.

That report showed that up to 31/12/2010, Rwandatel Ltd had a debt of 54 302 750 442RWF, it also showed that in 4/2011, the debts estimated at 54 982 210 279RWF. It shows that in May 2011, the assets of Rwandatel Ltd was 29 99 billions RWF. The reports also stated that on 30/04/2011, assets of Rwandatel Ltd were 50 million USD, and the debts 88.9 million USD.

The report showed that Rwandatel had problems in its billing system, and that was proved by the fact that among the money itshould be paid, it only receives under its 50%, it was on the annexe of the report which showed that in January 2011 only 54% of debts were paid, in February 51%, in March 48%, in April 44%, in May 49%. The report said that the problem of billing system and the recovery sum that should have been given by LAP GreenN but it did not explain what led to Rwandatel insolvency.

In the report, the administrator says that another reason which makes Rwandatel continue being insolvent is the withdrawal of Rwandatel's mobile license which led to the miss of the income that was generated by that business.^119(*)

The report also showed that the infrastructures of mobile networking were collapsing because they were not being used. This decrease Rwandatel Ltd assets. It also said that infrastructures of fixed lines and internet require the sum of 1 210 200 600RWF to be invested in so that they continue operating. The challenge was that the above said sum was not available and that the remains operation would not work because of lack of the needed sum.^120(*)

The temporary administrator said that Rwandatel Ltdtook a decision of suspending 134 employees, and stopped to pay its debts so that it continues operating, but this has the consequences on the society because the creditors are counting interests. In that report concluded saying that the business of Rwandatel should not be recovered and that the best decision should be to liquidate it.^121(*)

The court assessed if may decide if the proceedings of Rwandatel Ltd should start.

* ¹¹⁵ Rcom 0175/011/TC/Nyge of 18/07/2011, p.1.

* ¹¹⁶Ibid.

* ¹¹⁷ Nyge C C, 18/07/2011, Rcom 0175/011/TC/Nge, Registrar General of companies Vs Rwandatel Ltd. P.1.

* ¹¹⁸Idem. P.2.

* ¹¹⁹ Nyge C C, 18/07/2011, Rcom o175/011/TC/Nyge, Registrar General of companies Vs Rwandatel Ltd, p.2.

* ¹²⁰Ibid.

* ¹²¹Ibid.