Public Enterprises Reform and Divestiture Act

This section provides definitions of terms used in the Act (for example: "appointed day", "associate", "board", "committee", "currency point", and many others).

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Jurisdiction: Uganda
Instrument: Act or statute
Citation: Chapter 78
Version: Undated source snapshot
Language: en

Source attribution: Source: Uganda Legal Information Institute

Statute overview

About this statute

This section provides definitions of terms used in the Act (for example: "appointed day", "associate", "board", "committee", "currency point", and many others). Sets out the objectives of the Act, including giving effect to the Government Policy for Public Enterprise Reform and Divestiture and promoting reduction of Government equity in public enterprises, rehabilitation and restructuring, separation of ownership and management, accountability, and promotion of the private sector. Creates a body called the Divestiture and Reform Implementation Committee. Sets the committee membership (including the Minister responsible for finance as chair, four eminent Ugandans appointed by that Minister, and the chairperson of the Uganda Investment Authority), allows the Attorney General to attend and participate in an advisory capacity without a vote, entitles the line Minister to attend and vote on reforms in their sector and be deemed a member for that purpose, and permits the committee to co-opt experts who do not have voting rights. The committee must implement the Government’s policy on reform and divestiture of public enterprises; it may co‑opt persons to meetings who may participate but have no right to vote.

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Provisions of Public Enterprises Reform and Divestiture Act

Showing 47 of 47

Part I

Preliminary

1
Preliminary - Interpretation

AI-assisted research summary: This section provides definitions of terms used in the Act (for example: "appointed day", "associate", "board", "committee", "currency point", and many others).

Section Interpretation Section In this Act, unless the context otherwise requires— " appointed day " means the date appointed by the responsible Minister by statutory instrument made under section 29 (1) for the vesting of the undertaking of a public enterprise named in the instrument in the successor company of that enterprise; " associate ", in relation to a person, means— (i) a body corporate of which that person beneficially owns or controls, directly or indirectly, shares or securities currently convertible into shares carrying more than 10 percent of the voting rights (either under all circumstances or by reason of the occurrence of an event that has occurred and is continuing) or a currently exercisable right or option to acquire such shares or securities; (ii) a partner of that person acting on behalf of the partnership of which they are partners; (iii) a trust in which that person has a substantial beneficial interest or in respect of which he or she serves as trustee or in a similar capacity; (iv) a spouse or child of that person; or (v) a relative of that person or of his or her spouse, if the relative has the same residence as that person; " board " or "board of directors" means— (i) in relation to a public enterprise that is a company, the board of directors of that enterprise; and (ii) in relation to any other public enterprise , the persons occupying the positions in or in relation to that enterprise that are comparable with those of the board of directors of a company; " committee " means the Divestiture and Reform Implementation Committee; " currency point " has the meaning assigned to it in the Third Schedule to this Act; " Development Credit Agreement " means the Development Credit Agreement entered into on the 9th day of January, 1992, between the Republic of Uganda and the International Development Association; " divestiture " means the transfer of the proprietary interest in, or operational control of, a public enterprise or its assets from the State or that enterprise to private persons utilising one or more of the methods referred to in paragraph 7(1) of the Second Schedule to this Act, and includes where appropriate the winding up or dissolution of that enterprise; " divestiture account " means the divestiture account established by virtue of the Development Credit Agreement ; " financial year " means the financial year of the public enterprise ; " instrument " includes— (i) any instrument of any form or kind that creates, evidences, modifies or extinguishes rights , interests or liabilities or would do so if it or a copy of it were lodged, filed or registered under any enactment; and (ii) any judgment, order or process of a court; " liabilities " means liabilities, debts, charges, duties and obligations of every description, whether present or future, actual or contingent, and whether payable or to be observed or performed in Uganda or outside Uganda; " line Minister ", in relation to a public enterprise , means the Minister responsible for the sector in which that enterprise falls; " net book value " means the value in accounting terms of total assets less total liabilities and includes shareholders’ interest or equity or net worth; " present value " means the current hypothetical price of a given quantum of future profits as a basis for determining the notional value of an enterprise; " private ", in relation to ownership of an enterprise, means ownership by persons other than the State ; " property " means property of every kind whether tangible or intangible, real or personal, corporeal or incorporeal and, without limiting the generality of the foregoing, includes— (i) choses in action and money; (ii) goodwill; and (iii) rights , interests and claims of every kind in or to property, whether arising from, occurring under, created or evidenced by, or the subject of, an instrument or otherwise and whether liquidated or unliquidated, actual, contingent or prospective; " public ", in relation to ownership of the proprietary interest in any enterprise, means ownership by the State ; " public enterprise " means— (i) an enterprise specified in the First Schedule to this Act; (ii) any other body corporate, whether established under the Companies Act or under any other enactment, in which the State owns the whole or part of the proprietary interest or which is otherwise controlled directly or indirectly by the State ; and (iii) any company established for the purposes of, or in connection with, the divestiture of an enterprise specified in the First Schedule to this Act, whether pursuant to section 28 or otherwise; " redundancy account " means the redundancy account established by virtue of the Development Credit Agreement ; " reform " means— (i) the strengthening or improvement of the policies and procedures of a public enterprise and of its relationship with the Government; and (ii) the restructuring of a public enterprise ; " registrar " means the registrar of companies; " responsible Minister " means the Minister responsible for the reform and divestiture of public enterprises; " rights " means all rights, powers, privileges and immunities, whether actual, contingent or prospective; " shares " includes other proprietary interest; " State ", in relation to the ownership of the proprietary interest in an enterprise, includes a statutory corporation; " subsidiary " has the meaning assigned to it in the Companies Act; " successor company ", in relation to a public enterprise , means the company in which the undertaking of the public enterprise is to be vested in accordance with section 29 (1); " undertaking ", in relation to a public enterprise , means the property , rights and liabilities of the public enterprise ; " valuation " means an estimate of the worth of an enterprise.
2
Preliminary - Objectives of this Act

AI-assisted research summary: Sets out the objectives of the Act, including giving effect to the Government Policy for Public Enterprise Reform and Divestiture and promoting reduction of Government equity in public enterprises, rehabilitation and restructuring, separation of ownership and management, accountability, and promotion of the private sector.

Section Objectives of this Act Section Without prejudice to the general effect of subsection (1), the following objectives shall be deemed to fall under the objective specified in that subsection— the promotion of institutional arrangements, policies and procedures for— The main objective of this Act is to give effect to the Government Policy for Public Enterprise Reform and Divestiture published in Gazette No. 48 of 1st November, 1991, and also the Action Plan for Public Enterprise Reform and Divestiture. the reduction of Government equity holding in the public enterprises and thereby, inter alia , relieving the Government of the financial drain on its resources and the burden of their administration and raising revenue by means of divestiture , including, where necessary, liquidation or dissolution of public enterprises and by the promotion, development and strengthening of the private sector; ensuring the efficient and successful management, financial accounting and budgetary discipline of public enterprises; ensuring the separation of ownership and management functions; enabling the Government to play its proper role more effectively as owner of public enterprises; and enforcing accountability; the rehabilitation and restructuring where appropriate, of public enterprises; and the promotion of local entrepreneurship.

Part II

Institutional framework for reform and divestiture

3
Institutional framework for reform and divestiture - Divestiture and Reform Implementation Committee

AI-assisted research summary: Creates a body called the Divestiture and Reform Implementation Committee.

Section Divestiture and Reform Implementation Committee Section There shall be a body to be known as the Divestiture and Reform Implementation Committee.
4
Institutional framework for reform and divestiture - Membership of committee and participation in its proceedings and functions

AI-assisted research summary: Sets the committee membership (including the Minister responsible for finance as chair, four eminent Ugandans appointed by that Minister, and the chairperson of the Uganda Investment Authority), allows the Attorney General to attend and participate in an advisory capacity without a vote, entitles the line Minister to attend and vote on reforms in their sector and be deemed a member for that purpose, and permits the committee to co-opt experts who do not have voting rights.

Section Membership of committee and participation in its proceedings and functions Section The committee shall consist of the following members— the Minister responsible for finance who shall be the chairperson; the responsible Minister ; four eminent Ugandans with considerable knowledge and experience in industry, commerce, law, finance or economics appointed by the Minister responsible for finance; and the chairperson of the Uganda Investment Authority. The Attorney General is entitled to attend personally or by a representative and participate in the proceedings of the committee in an advisory capacity without the right to vote. The line Minister shall be entitled to attend and participate in the proceedings of the committee and shall have a right to vote in respect of the reform and divestiture of a public enterprise under his or her sector and shall for that purpose be deemed to be a member of the committee . The committee may co-opt any person to assist the committee in carrying out its functions if the committee is satisfied that the person possesses expertise in relation to the public enterprise ; but the person co-opted under this subsection shall have no right to vote on any matter coming before the committee .
5
Institutional framework for reform and divestiture - Functions of committee

AI-assisted research summary: The committee must implement the Government’s policy on reform and divestiture of public enterprises; it may co‑opt persons to meetings who may participate but have no right to vote.

Section Functions of committee Section The committee shall be responsible for implementing the Government’s policy on reform and divestiture of public enterprises under this Act. The committee shall also have such other functions as are prescribed by this Act. The committee may co-opt to any of its meetings any person whom the committee is satisfied can assist it at the meeting; and a person so co-opted may participate in proceedings of the committee at that meeting but shall have no right to vote. The proceedings of the meetings of the committee shall be as set out in the Fourth Schedule to this Act.
6
Institutional framework for reform and divestiture - Disclosure of interest

AI-assisted research summary: Committee members who become aware they have a private or professional interest in a matter must disclose that interest to the committee and must not be present for deliberation or take part in the committee's decision.

Section Disclosure of interest Section A disclosure of interest under subsection (1) shall be recorded in the minutes of the meeting of the committee , and the member making the disclosure shall not— If a member of the committee , or any associate of any such member, is directly or indirectly interested in a private or professional capacity in a matter being considered or about to be considered by the committee , the member shall, as soon as possible after the relevant facts have come to his or her knowledge, disclose the nature of the interest to the committee . be present during any deliberation on the matter by the committee ; or take part in the decision of the committee . This section shall, with the necessary modifications, apply to a person who is co-opted to a committee meeting as referred to in section 5 .

Part III

Institutional framework for monitoring

7
Institutional framework for monitoring - Monitoring by Minister responsible for finance

AI-assisted research summary: The Minister responsible for finance must monitor and oversee public enterprises, including exercising strategic monitoring, liaising with line Ministers on performance and plans, monitoring subsidies to eliminate them, identifying and settling financial flows with Government, and overseeing caretaker costs for divestiture or distressed enterprises.

Section Monitoring by Minister responsible for finance Section The Minister responsible for finance shall— Without prejudice to subsection (1), the Minister responsible for finance shall— exercise a strategic economic monitoring role in relation to public enterprises; and liaise as necessary with line Ministers in monitoring the performance of public enterprises and in participating in the development and supervision of their operating plans. monitor public enterprise subsidies both direct and indirect with a view to the phased elimination of all public enterprise subsidies; identify financial flows and dues between public enterprises and the Government and arrange for their settlement; and oversee caretaker costs and activities of public enterprises which have been selected for divestiture and those that are financially distressed.

Part IV

Monitoring

10
Monitoring - Employee participation in ownership

AI-assisted research summary: A public enterprise may allow employees to invest in shares and may permit various forms of ownership and payment arrangements benefiting employees.

Section Employee participation in ownership Section A public enterprise may provide for participation in the ownership of the enterprise through investment by its employees in shares and may, to this end, permit— individual, union, collective and institutional ownership of shares ; payment of share calls and other dues through discounts, installments, bonus schemes and other arrangements intended to benefit employees.
11
Monitoring - Operating plans

AI-assisted research summary: Boards of public enterprises under divestiture must submit draft operating plans to the Minister responsible for finance and the line Minister two months before the financial year; the Minister must review and comment within one month; boards must incorporate comments and deliver final plans by the start of the financial year; boards may modify plans with prior notice and Ministerial approval; boards are accountable for decisions and derogations.

Section Operating plans Section Each operating plan shall contain such information and be in such form as is specified in guidelines issued to the relevant public enterprise by the Minister responsible for finance in consultation with the line Minister and shall include without limitation to the foregoing the following information— The board of directors of each public enterprise under divestiture shall submit to the Minister responsible for finance and the line Minister a draft operating plan in respect of the activities of that public enterprise and its subsidiaries during the next succeeding financial year , not later than two months prior to the commencement of that financial year . the objectives of the public enterprise ; the nature and scope of the activities to be undertaken; the accounting policies of the public enterprise ; the performance targets and other measures by which the performance of the public enterprise may be judged in relation to its objectives; an estimate of the profit that is intended to be distributed to the Government in respect of the relevant financial year ; and the kind of information to be provided to the Minister responsible for finance and the line Minister by the public enterprise during the course of the relevant financial year , including the information to be included in each half-yearly report. The Minister responsible for finance, in consultation with the line Minister , shall review the draft operating plan and send his or her comments on it to the board of directors concerned within one month after its original submission, and the board shall incorporate those comments into the operating plan in a manner satisfactory to the Minister responsible for finance in consultation with the line Minister and deliver the final operating plan to each such Minister not later than the date of commencement of the financial year with which the operating plan is concerned. An operating plan for a public enterprise may be modified by the board of directors of that public enterprise at any time if the board has first given written notice to the Minister responsible for finance and the line Minister of the proposed modification and the Minister responsible for finance in consultation with the line Minister has approved the modification. All decisions relating to the operation of a public enterprise shall be made by or pursuant to the authority of the board of directors in accordance with its operating plan; and the board shall be accountable to the Minister responsible for finance acting in consultation with the line Minister for any derogation from the operating plan.
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Monitoring - Annual reports to responsible Minister

AI-assisted research summary: The board of directors of a public enterprise must, within three months after the end of each financial year, deliver to the Minister responsible for finance and the line Minister a report of operations, audited financial statements and the auditor’s report.

Section Annual reports to responsible Minister Section The board of directors of a public enterprise shall, within three months after the end of each financial year , deliver to the Minister responsible for finance and the line Minister — a report of the operations of the public enterprise and of its subsidiaries during that financial year ; audited financial statements for that financial year , consisting of a statement of a balance sheet, profit and loss account, source and application of funds, and such other statements as may be necessary to show the financial position of the public enterprise and its subsidiaries and the results of its operations for that financial year ; the auditor’s report on the financial statements referred to in paragraph (b) of this subsection. Every report under subsection (1)(a) shall contain such information as is necessary to enable an informed assessment to be made of the operations of the public enterprise and its subsidiaries, including a comparison of the performance of the public enterprise and its subsidiaries with the relevant operating plan, and shall state the dividend payable to the Government by the public enterprise for the financial year to which the report relates.
13
Monitoring - Submission of report and other information to the Minister, etc.

AI-assisted research summary: Boards of public enterprises must deliver a half-year report within two months after the end of the first half of each financial year to the Minister responsible for finance and the line Minister; reports must include operating-plan information; chief executives, directors, secretaries and managers must supply information when requested in writing by either Minister; the Minister responsible for finance may access books and records on premises with reasonable notice and employees must not impede such access.

Section Submission of report and other information to the Minister, etc. Section Within two months after the end of the first half of each financial year of a public enterprise , the board of directors of that public enterprise shall deliver to the Minister responsible for finance and the line Minister a report on its operations and the operations of its subsidiaries during that half year. Each report required by this section shall include the information required by the operating plan to be included in it. Each chief executive, director, secretary and manager of a public enterprise shall supply to the Minister responsible for finance and the line Minister such information relating to the affairs of that public enterprise as either Minister may, from time to time, in writing request. The Minister responsible for finance shall have the power to obtain access to the books and records of each public enterprise at its premises during normal working hours upon giving reasonable notice; and no chief executive, director, secretary, manager or other employee of a public enterprise shall impede such access.
14
Monitoring - Confidential information not to be divulged to third parties

AI-assisted research summary: Employees of a public enterprise must not divulge confidential information to third parties without board authority.

Section Confidential information not to be divulged to third parties Section No chief executive, director, secretary, manager or other employee of a public enterprise shall divulge any confidential information in relation to that public enterprise to any third party without the authority of the board of directors of that public enterprise .
15
Monitoring - Annual certificate of responsibility

AI-assisted research summary: Public enterprises must issue, within three months after each financial year, a certificate signed by chairperson, CEO and CFO, deliver a copy to the Minister responsible for finance and the line Minister, and publish a copy in a national newspaper with audited financial statements.

Section Annual certificate of responsibility Section A public enterprise shall cause to be issued within three months after the end of each financial year , a public certificate signed by its chairperson, chief executive officer and its chief financial officer acknowledging their responsibility for the proper and due regard for the safeguarding of the assets of the enterprise and their compliance with those responsibilities. A copy of the certificate shall be delivered to the Minister responsible for finance and the line Minister , and the enterprise shall cause a copy to be published in a national newspaper together with the audited financial statements of the enterprise.
16
Monitoring - State shares

AI-assisted research summary: Shares of the State in a public enterprise held in the name of a person described as Minister must be held by whoever is for the time being holding the office of Minister; the Minister responsible for finance or the line Minister may, by written notice, authorise a representative to act and that authorised person is entitled to exercise the Minister's powers at shareholder meetings.

Section State shares Section Shares of the State in a public enterprise held in the name of a person described as Minister shall be held by the person for the time being holding the office of Minister. Notwithstanding any other enactment or rule of law, it shall not be necessary to complete or register a transfer of shares of the kind referred to in subsection (1) consequent upon a change in the person holding the office of Minister by reason only of that change. The Minister responsible for finance or the line Minister may, at any time, by written notice to the managing director or other chief executive of a public enterprise , authorise, on such terms and conditions as are specified in the notice, such person as the Minister thinks fit to act as the Minister’s representative at any or all of the meetings of shareholders, and any person so authorised shall be entitled to exercise the same powers on behalf of the Minister as the Minister could have exercised if present in person at the meeting or meetings.
17
Monitoring - Auditor General to audit public enterprises

AI-assisted research summary: The Auditor General must audit the accounts of public enterprises in classes I and II, may appoint joint auditors, public enterprises must pay prescribed fees, and must publish audited financial statements within ninety days after the end of their financial year.

Section Auditor General to audit public enterprises Section Notwithstanding the Companies Act, the Auditor General shall be responsible for auditing the accounts of public enterprises in classes I and II of the First Schedule and shall have, in relation to them, the same duties and powers as he or she has in respect of Government departments and, in particular, with regard to public funds and Government property . Without prejudice to the general effect of subsection (1), the Auditor General shall cause the accounts of each public enterprise to be audited at least once a year. Every public enterprise shall pay to the Auditor General’s office for carrying out its functions under this section, fees at such rates as may be prescribed by the Minister responsible for finance. Without limiting subsections (1) to (3), the Auditor General may appoint a person or a firm that is qualified for appointment as an auditor to be a joint auditor of the public enterprise or any of its subsidiaries. Every public enterprise shall cause to be published annually in a national newspaper its audited financial statements consisting of a balance sheet and profit and loss account within ninety days after the end of its financial year .
18
Monitoring - Minister to lay reports, etc. before Parliament

AI-assisted research summary: The Minister must lay specified documents and reports before Parliament as soon as practicable after publication or receipt.

Section Minister to lay reports, etc. before Parliament Section The line Minister shall also lay before Parliament, as soon as possible after receiving them— The line Minister of the public enterprise shall lay before Parliament the memorandum and articles of association of a public enterprise for whose affairs he or she is responsible after they have been published or otherwise adopted and also any changes made in them as soon as practicable after they have been published or adopted. the operating plan of the public enterprise and any modifications made to it; the reports described in section 12 ; and the auditor’s report in respect of the preceding financial year .
8
Monitoring - Operational principles

AI-assisted research summary: Managers, directors, line Ministers of enterprises and the Minister responsible for finance must be guided by specified considerations when determining policies, operational issues and plans of a public enterprise.

Section Operational principles Section In determining the policies, operational issues and plans of a public enterprise generally, the managers, directors and line Ministers of enterprises and the Minister responsible for finance shall be guided by the following considerations— the commercial objectives of the enterprise; the need for financial self-sufficiency of the enterprise; developmental strategies of the Government; international and regional obligations of Uganda; inducement for Ugandan and foreign investment and participation in business by the general public .
9
Monitoring - Management of public enterprises

AI-assisted research summary: Sets policy principles for managing public enterprises and requires qualified managers and directors; shareholders appoint boards; boards must appoint managers by merit-based open competition with public advertisement and interviews.

Section Management of public enterprises Section In the management of public enterprises, Government policy shall recognise the need for the following fundamental conditions— Government policy towards the management of public enterprises shall also be guided by the following— autonomy in public enterprise management, which shall be deemed to be freedom of the enterprise to manage its operational and financial affairs efficiently without interference or hindrance; accountability of public enterprises; support for improved performance; rewarding good performance while censuring poor performance; clear definition of the functions of boards of directors; selecting experienced and qualified boards of directors, chief executive officers and managers. an institutionalised mechanism with defined and published procedures and criteria; elimination of nonobjective and other extraneous factors for public enterprise appointments; equal opportunity for employment and selection; and promotion of confidence, initiative, professionalism and excellence in management. The managers and directors of a public enterprise shall be persons who are qualified by training and experience to assist the enterprise in achieving its objectives. The board of a public enterprise shall be appointed by the shareholders of the enterprise in a general meeting in accordance with the Companies Act where applicable. The board of directors of the enterprise shall appoint the managers, including the chief executive, based on merit and open competition through public advertisement indicating the qualifications and experience required and interviews by competent panels.

Part V

Reform

19
Reform - Financial discipline

AI-assisted research summary: The Government’s policies regarding the reform of public enterprises shall recognise specified basic requirements including strict budgetary compliance and separation of commercial and non‑commercial objectives.

Section Financial discipline Section The Government’s policies regarding the reform of public enterprises shall recognise the following basic requirements— strict compliance with the budget and financial discipline in public enterprises; separation of commercial and noncommercial objectives within public enterprises; setting up more efficient operating systems within the enterprise.
20
Reform - Criteria for reform, restructuring, etc.

AI-assisted research summary: Government is not obliged to support unprofitable enterprises; profitability is to be determined by the Minister responsible for finance. The responsible Minister sets selection criteria and restructuring modes, determines actions for underperforming restructured enterprises, and has power to formulate and execute reform plans; consultation with the relevant line Minister is required before determinations or exercise of powers.

Section Criteria for reform, restructuring, etc. Section The Government shall not be obliged to support unprofitable enterprises, and the question of whether any enterprise is or is not profitable shall be determined by the Minister responsible for finance. The criteria for selection of public enterprises for restructuring and the individual mode of restructuring shall be determined by the responsible Minister . The responsible Minister shall determine the course or courses of action, if any, to be taken in the case of restructured enterprises that do not meet their operating and financial targets. The responsible Minister shall have the power to formulate and execute detailed plans for the reform of any public enterprise . The Minister responsible for finance or the responsible Minister , as the case may be, shall consult with the relevant line Minister prior to his or her making any determination or exercising any power in relation to a public enterprise under this section.
21
Reform - Compensation for redundant employees

AI-assisted research summary: The Minister responsible for finance must ensure there is provision to pay compensation to employees declared redundant by restructuring or liquidation of public enterprises by establishing and operating a redundancy account at an approved commercial bank.

Section Compensation for redundant employees Section The Minister responsible for finance shall ensure that provision is made for payment of compensation to employees who are declared redundant as a result of the restructuring or liquidation of public enterprises through the establishment and operation of a redundancy account to be opened at a commercial bank approved by the Minister responsible for finance.

Part VI

Divestiture

22
Divestiture - Divestiture

AI-assisted research summary: Specifies how enterprises listed in the First Schedule are to be treated by class: Class I to be fully owned by the State; Class II the State retains majority and remainder disposed to non-State persons; Class III the State shall divest all shares to non-State persons; Class IV the State shall liquidate the enterprises.

Section Divestiture Section Subject to this Act, the enterprises specified in the First Schedule to this Act shall be dealt with as follows— the enterprises specified in class I of that Schedule shall be or continue to be fully owned by the State ; as to the enterprises specified in class II of that Schedule, the State shall retain a majority of the shares of each enterprise, and the remainder shall be disposed of to persons other than the State in accordance with this Act; as to the enterprises specified in class III of that Schedule, the State shall totally divest itself by disposal of all the shares in each enterprise to persons other than the State in accordance with this Act; and as to the enterprises specified in class IV of that Schedule, the State shall liquidate the enterprises in accordance with this Act. For the avoidance of doubt, any company established for the purposes of, or in connection with, the divestiture of an enterprise specified in the First Schedule to this Act whether under section 28 or otherwise shall be deemed to be listed in the same class as that enterprise. The divestiture under this section shall be carried out in accordance with the divestiture guidelines set out in the Second Schedule to this Act. All proceeds of divestiture of a public enterprise shall be deposited in the divestiture account to be maintained in commercial banks and development banks designated by the Minister responsible for finance in consultation with the Divestiture and Reform Implementation Committee. Subject to section 26 , the divestiture account shall be used for promoting Ugandan entrepreneurs for agricultural and industrial development.
23
Divestiture - Actual sale and transfer of public enterprises

AI-assisted research summary: The Minister responsible for finance may enter into instruments and take actions necessary to carry out the divestiture of public enterprises, transfer rights or assets between public enterprises, must obtain committee approval before transferring proprietary interest into private ownership, and must deposit all proceeds of divestiture into a designated divestiture account.

Section Actual sale and transfer of public enterprises Section Subject to this Act (but notwithstanding the provisions of the Companies Act, any other enactment or the articles of association of any public enterprise or any rule of law), the Minister responsible for finance shall have the power, in relation to a public enterprise , to enter into, execute, make or give, on behalf of the Government or such enterprise, as the case may be, such contracts, agreements, conveyances, deeds, leases, licences and other instruments, undertakings and notices as shall be necessary or desirable to give effect to the divestiture of the enterprise. Without prejudice to the general effect of subsection (1), the Minister responsible for finance, or the responsible Minister may, for purposes of this Act, transfer any right, asset, property , obligation or liability of any existing public enterprise to any other public enterprise established to replace it in pursuance of this Act. Where a contract, agreement, conveyance, deed, lease, licence or other instrument , undertaking or notice of the type mentioned in subsections (1) and (2) involves the transfer of a proprietary interest into private ownership, the responsible Minister shall first obtain the approval of the committee to the commercial terms of divestiture of the enterprise concerned. All proceeds of divestiture of a public enterprise , including, for the avoidance of doubt, any proceeds to which, but for this subsection, the enterprise concerned would be entitled, shall be deposited in the divestiture account to be maintained in commercial banks and development banks designated by the Minister responsible for finance in consultation with the committee and used solely in accordance with this Act. The Minister responsible for finance may delegate any of his or her powers under Part VI of this Act to the responsible Minister .
24
Divestiture - Power of responsible Minister to direct transfer of shares

AI-assisted research summary: The responsible Minister may require holders of Government shares in certain class II–IV public enterprises to transfer those shares to the responsible Minister or offer them for sale under preemption rights; notices must be acted on within thirty days, and boards and secretaries must cooperate.

Section Power of responsible Minister to direct transfer of shares Section Subject to this Act, the responsible Minister may— in the case of a public enterprise specified in class II, III or IV of the First Schedule to this Act which is wholly owned by the Government or which is only partly owned by the Government but in respect of which there are no applicable preemption rights on transfer conferred under its articles of association or in any other way, by notice to the line Minister or other person or persons registered as the holder of any share of the Government in that enterprise, require that line Minister or person or persons to cause their interest in that share to be transferred into the name of the responsible Minister or the Minister responsible for finance; and in the case of a public enterprise specified in class II, III or IV of the First Schedule to this Act, which is only partly owned by the Government and in respect of which there are applicable preemption rights on transfer conferred under its articles of association or in any other way, by notice to the line Minister or other person or persons registered as the holder of any share of the Government in that enterprise, require that line Minister or person or persons to offer that share for sale to the other shareholders of that enterprise in accordance with those preemption rights and subject to that, to any directions given by the responsible Minister and, if the other shareholders fail or decline to purchase that share when offered for sale, by notice require that line Minister or other person or persons to offer that share for sale to any other person or persons in accordance with those preemption rights and articles of association and, subject to that, any directions given by the responsible Minister . Subsection (1) shall apply to any public enterprise specified in class II, III or IV of the First Schedule to this Act which is wholly or partly owned by another public enterprise which latter enterprise is wholly owned by the Government and which is referred to in this section as the holding company as if references in that subsection to the Government and to the line Minister or other person or persons registered as the holder of any share of the Government were, in each case, to the holding company and, in those circumstances, any notice by the responsible Minister under subsection (1) shall be addressed to the person or secretary of the board of directors of the holding company, and the chairperson or secretary as the case may be shall cause the holding company to comply with the terms of the notice. Any notice given by the responsible Minister under subsection (1) shall be in such form as the responsible Minister may determine and shall be acted upon by the person to whom the notice is addressed within thirty days after receipt. Notwithstanding the Companies Act, any other enactment or the articles of association of any public enterprise , it shall be the duty of the board of directors and the secretary of every public enterprise to cooperate with the responsible Minister in the transfer of any share under this section.
25
Divestiture - Shares to public and employees, etc.

AI-assisted research summary: Shares, property or enterprises may be issued and disposed of under section 23 to members of the public, to attract capital (including by offering special or preferential rights), or by allotting part or all of the issue to individuals, firms, corporations or institutions.

Section Shares to public and employees, etc. Section Shares, property or enterprises may be issued and disposed of under section 23 to— members of the general public ; attract capital and investments by offering special rights , preferential shares or otherwise further the aims of the Investment Code Act; ensure the disposal of the shares of the enterprise by allotting part or the whole of the issue to an individual, a firm, a corporation or an institution.
26
Divestiture - Use of proceeds of divestiture

AI-assisted research summary: The Minister responsible for finance must use divestiture proceeds in the divestiture account to meet specified liabilities of public enterprises; the Minister may transfer surplus proceeds to the redundancy account.

Section Use of proceeds of divestiture Section The Minister responsible for finance may use the proceeds of divestiture in the divestiture account to meet— liabilities of a public enterprise specified in any of the classes referred in paragraph (a) which— costs and expenses associated with termination of contracts of employment between a public enterprise specified in class II, III or IV of the First Schedule to this Act and its employees as a result of the divestiture of that enterprise; for the purposes of divesting the enterprise in the manner approved by the committee require satisfaction before that enterprise’s divestiture ; or given the mode and terms of divestiture , are directly or indirectly assumed by the Government at the time of divestiture ; costs and expenses incurred in the process of preparing a public enterprise specified in any of the classes referred to in paragraph (a) for divestiture ; and costs and expenses of divestiture . Any costs and expenses associated with termination of contracts of employment between a public enterprise and its employees shall be paid from the proceeds of divestiture of that enterprise in priority to all other liabilities , costs and expenses referred to in subsection (1). Proceeds of divestiture of an enterprise in the divestiture account which, in the opinion of the responsible Minister , are not required to meet any present or future costs, expenses or liabilities of the type mentioned in subsection (1), whether relating to that enterprise or otherwise, may, if so determined by the Minister, be transferred, wholly or partly, to the redundancy account and, subject to the foregoing, shall be used for promoting Ugandan entrepreneurs for agricultural and industrial development.
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Divestiture - Acquisition of shares by Minister

AI-assisted research summary: Ministers who hold shares in an enterprise subject to divestiture must not sell or dispose of those shares or allow allotment to non-shareholding persons except as required for divestiture; the finance Minister and responsible Minister may acquire shares for the State with committee approval; any money a Minister must pay for shares is to come from monies appropriated by Parliament.

Section Acquisition of shares by Minister Section A Minister who is a shareholder in an enterprise which is subject to divestiture shall not, except as required for the purposes of the divestiture — The Minister responsible for finance and the responsible Minister may, from time to time, with the approval of the committee on behalf of the State , subscribe for or otherwise acquire the requisite number of shares in any enterprise in which the State is required to hold shares . Any money required to be paid by a Minister for subscribing or applying for or being allotted shares by virtue of subsection (1) shall be paid out of monies appropriated by Parliament for the purpose. sell or otherwise dispose of any shares in any enterprise held in the Minister’s name; or permit shares of the State in the enterprise to be allotted to any person other than a shareholding Minister.
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Divestiture - Formation of successor companies

AI-assisted research summary: The responsible Minister may form and register a company limited by shares for specified public enterprises; the shareholders shall be the responsible Minister and the Minister responsible for finance, shares to be credited as fully paid and held on behalf of the Government; Companies Act provisions apply subject to stated exceptions and certain Companies Act sections are to be read as referring to two members prior to divestiture.

Section Formation of successor companies Section This section applies to every public enterprise specified in class II, III or IV of the First Schedule to this Act that is not a public or private limited liability company under the Companies Act. Notwithstanding anything in any enactment under which a public enterprise referred to in subsection (1) was established, the responsible Minister may, from time to time, form and register under the Companies Act, in respect of that enterprise, a company limited by shares , having the shareholding referred to in subsection (3) and, subject to the foregoing, such memorandum and articles of association, name and directors as the responsible Minister shall determine. The shareholders of a company formed and registered under subsection (2) shall be the responsible Minister and the Minister responsible for finance, each of whom shall be issued such number of shares , credited as fully paid, as the responsible Minister shall determine, and all such shares held by a shareholding Minister shall be held on behalf of the Government. Except as provided in this Act, and subject to subsection (5), the Companies Act shall apply to every company formed and registered under this section. In the application of the Companies Act to any company formed and registered under this section as a public company, section 32 (relating to carrying on business when the number of members is reduced below the legal minimum) and section 222(d) (relating to winding up by the court when the number of members is reduced below the legal minimum) of the Companies Act shall be construed, at all times prior to the divestiture of the company, as if references in them to seven members were references to two members.
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Divestiture - Minister to appoint a date for vesting of undertaking of public enterprises in successor company

AI-assisted research summary: The responsible Minister must appoint a date by statutory instrument for vesting; on that appointed day certain consequences follow for the enterprise and its board members, including that board members cease to hold office and are not entitled to compensation.

Section Minister to appoint a date for vesting of undertaking of public enterprises in successor company Section On the appointed day in relation to a public enterprise — On a date appointed by the responsible Minister by statutory instrument , the undertaking of the public enterprise named in the instrument shall, by virtue of this section, vest in the successor company of that public enterprise . the board of directors of that enterprise shall be deemed to be dissolved; and every person holding office as a member of the board shall cease to hold that office, and no such member shall be entitled to compensation in respect of loss of office.
30
Divestiture - Consequential provision

AI-assisted research summary: From the appointed day, references and existing contracts or proceedings involving a public enterprise are to be read as referencing, binding, and enforceable by its successor company, and pending actions may be continued by the successor company without amendment to documents.

Section Consequential provision Section Without limiting the general effect of section 29 , on and after the appointed day in relation to a public enterprise— nothing effected or authorised by this Act shall be regarded— a reference, express or implied, to the public enterprise in any instrument made, given, passed or executed before the appointed day shall be read and construed as a reference to its successor company ; without prejudice to section 35 , a reference express or implied to the public enterprise in any enactment shall be read and construed as a reference to its successor company; all contracts, agreements, conveyances, deeds, leases, licences and other instruments, undertakings and notices whether or not in writing entered into by, made with, given to or by or addressed to the public enterprise whether alone or with any other person before the appointed day and subsisting immediately before the appointed day shall, to the extent that they were previously binding on and enforceable by, against or in favour of the public enterprise , be binding on and enforceable by, against or in favour of its successor company as fully and effectively in every respect as if, instead of the public enterprise , the successor company had been the person by whom they were entered into, with whom they were made, to or by whom they were given or to whom they were addressed, as the case may be; as placing the public enterprise or its successor company or any other person in breach of contract or confidence or as otherwise making any of them guilty of a civil wrong; as giving rise to a right for any person to terminate or cancel any contract or arrangement or to accelerate the performance of any obligation; or as placing the public enterprise or its successor company or any other person in breach of any enactment, rule of law or contractual provision prohibiting, restricting or regulating the arrangement or transfer of any property or the disclosure of any information; and any action, arbitration, proceedings or cause of action which, immediately before the appointed day , is pending or existing by, against or in favour of the public enterprise or to which the public enterprise is a party may be prosecuted and, without amendment of any writ, pleading or other document, continued and enforced by, against or in favour of its successor company .
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Divestiture - Protection of employee contracts, etc.

AI-assisted research summary: On the appointed day, each employee of the public enterprise shall become an employee of its successor company.

Section Protection of employee contracts, etc. Section Notwithstanding any other provision of this Act— on the appointed day in relation to a public enterprise , each employee of the public enterprise shall become an employee of its successor company but, for the purposes of every enactment, law, determination, contract and agreement relating to the employment of each such employee, the contract of employment of that employee shall be deemed to have been unbroken and the period of service of that employee with the public enterprise , and every other period of service of that employee that is recognised as continuous service by the public enterprise , shall be deemed to have been a period of service with the company; the terms and conditions of employment of each such employee shall, until varied, be identical with the terms and conditions of the employee’s employment with the public enterprise immediately before the appointed day and be capable of variation in the same manner; and property held on trust or vested in any person under any provident, benefit, superannuation or retirement fund or scheme for the employees of the public enterprise , their dependents or other persons immediately before the appointed day shall, on and after the appointed day , be deemed to be held on trust or vested in that person for those employees in their capacity as employees of the successor company of the public enterprise , their dependents or other persons on the same terms and conditions; and every reference in any instrument constituting that fund or scheme to the public enterprise , an employee of the public enterprise , a dependent of that employee or any other person shall be read and construed as a reference to the successor company of that public enterprise , an employee of that company, a dependent of that employee or any other person, as the case may be.
32
Divestiture - Vesting of land of public enterprise in successor company

AI-assisted research summary: Registrars and similar officials are not required solely by this Act to change a public enterprise's name in registers; a successor company's presentation of an instrument with a recital that property has vested in it is, absent proof to the contrary, sufficient proof of that vesting.

Section Vesting of land of public enterprise in successor company Section No registrar of lands or any other person charged with the keeping of any books or registers shall be obliged solely by reason of this Act to change the name of a public enterprise to that of its successor company in those books or registers or in any document. The presentation to any registrar or other person of any instrument , whether or not comprising an instrument of transfer, by a successor company of a public enterprise executed or purporting to be executed by the company, relating to any property held immediately before the appointed day in relation to the public enterprise by that public enterprise and containing a recital that that property has become vested in the company by virtue of this Act shall, in the absence of proof to the contrary, be sufficient proof that the property is vested in the company.
33
Divestiture - Successor company and public enterprises to be treated as same for tax purposes

AI-assisted research summary: Section Successor company and public enterprises to be treated as same for tax purposes Section For the purpose of any enactment that imposes or provides for the collection of a tax, duty, levy or other charge— a public enterprise and its

Section Successor company and public enterprises to be treated as same for tax purposes Section For the purpose of any enactment that imposes or provides for the collection of a tax, duty, levy or other charge— a public enterprise and its successor company shall be deemed to be the same person; and all transactions entered into by, and acts of, the public enterprise before the appointed day in relation to the public enterprise shall be deemed to have been entered into by, or to be the acts of, the successor company and to have been entered into or performed by the company at the time when they were entered into or performed by the public enterprise .
34
Divestiture - Registration of two or more successor companies in place of a single public enterprise

AI-assisted research summary: The Act does not prevent registering two or more successor companies under section 28 to replace a single public enterprise, and the enterprise's property, rights and liabilities must be divided between those successor companies in accordance with the statutory instrument made under section 29(1); sections 28 to 35 apply accordingly.

Section Registration of two or more successor companies in place of a single public enterprise Section Nothing is this Act shall prevent two or more successor companies being registered under section 28 in the place of a single public enterprise and, in those circumstances, the property, rights and liabilities of that enterprise shall be divided between the successor companies in accordance with the statutory instrument in relation to the enterprise made under section 29 (1), and sections 28 to 35 shall be construed accordingly.
35
Divestiture - Effect of divestiture or liquidation on relevant enactments

AI-assisted research summary: When a public enterprise is divested or its undertaking vests in a successor company, the enactment under which it existed stands repealed; the repeal takes effect automatically on vesting or on a date the Minister responsible for finance may appoint; repeal does not affect government agreements for the enterprise; a statutory instrument may keep particular provisions in force and treat references as to the successor company.

Section Effect of divestiture or liquidation on relevant enactments Section Upon the completion of the divestiture or liquidation or, as the case may be, upon vesting in the successor company under section 29 of the undertaking of any enterprise being a statutory corporation, the enactment under which the enterprise exists shall subject to subsection (4) stand repealed. Any repeal effected by this section shall take effect in the case of a vesting of the undertaking automatically upon the vesting and, in any other case, on such date as the Minister responsible for finance may, by statutory instrument , appoint, being the date of completion of the divestiture or liquidation of the relevant enterprise. The repeal of any enactment under subsection (1) shall not affect any agreement, contract or other liability which the Government may have undertaken in respect of the particular enterprise. A statutory instrument in relation to a public enterprise made under section 29 (1) may provide for any one or more provisions in any enactment under which the enterprise exists to continue in force, in which event all references express or implied to the enterprise in the provision shall be read and construed as references to its successor company.

Part VII

Offences and penalties

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Offences and penalties - Penalty for stripping or concealing assets

AI-assisted research summary: Makes it an offence for any person, in relation to a public enterprise, to fraudulently sell or transfer its property or to deliberately conceal its property from the Minister(s) or ministry officials when that concealment reduces divestiture proceeds.

Section Penalty for stripping or concealing assets Section Any person who in respect of a public enterprise — fraudulently sells or transfers any property of that public enterprise ; or deliberately conceals from the Minister responsible for finance or the responsible Minister or officials and staff in those Ministries any property of that public enterprise and the concealment results in a reduction of the proceeds of divestiture ,
37
Offences and penalties - Penalty for causing financial loss

AI-assisted research summary: Public enterprise senior staff or employees must not act or omit an act if they know or have reason to believe it will cause financial loss to the public enterprise.

Section Penalty for causing financial loss Section No chief executive, director, secretary, manager or other employee of a public enterprise shall do any act or omit to do any act knowing or having reason to believe that the act or omission will cause financial loss to that public enterprise .
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Offences and penalties - Restriction on persons, parties participating in divestiture

AI-assisted research summary: Certain named ministers, officials, committee members, advisers and enterprise leaders must not participate, directly or indirectly, in purchasing a public enterprise, subject to subsection (2) and except when acting in accordance with their duties under the Act; participation in public offers of shares and specific buyouts for employees are excepted.

Section Restriction on persons, parties participating in divestiture Section Subject to subsection (2) and except for the purposes of, or in connection with, carrying out his or her duties and responsibilities in accordance with this Act, none of the following persons or any associate of any such person shall participate, directly or indirectly, in the purchase of a public enterprise — the Minister responsible for finance and officials and staff in his or her Ministry; the responsible Minister and officials and staff in his or her Ministry; the relevant line Minister and officials and staff in his or her Ministry; members of the committee ; any person advising the Government in relation to the divestiture of the enterprise; and each chief executive, director, secretary, manager or other employee of the enterprise. Subsection (1) shall not apply to participation in a public offer of shares and, in the case of a person mentioned in subsection (1)(f), participation by that person in a management buyout or scheme for worker participation.
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Offences and penalties - Offences and penalties

AI-assisted research summary: Contravening sections 6, 11, 12, 13, 14, 24, 37 or 38 is an offence punishable by a fine up to one hundred currency points, imprisonment up to two years, or both; failures by a public enterprise board to comply with sections 11, 12 or 13 or paragraph 6(1) of the Second Schedule are treated as offences by each board member.

Section Offences and penalties Section Any person who contravenes any of the provisions of section 6 , 11 , 12 , 13 , 14 , 24 , 37 or 38 commits an offence and is liable on conviction to a fine not exceeding one hundred currency points or to imprisonment for a term not exceeding two years or to both. Any failure by the board of directors of a public enterprise to comply with sections 11 , 12 or 13 or paragraph 6(1) of the Second Schedule to this Act shall be treated as an offence for the purposes of subsection (1) by each member of the board concerned.

Part VIII

Miscellaneous

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Miscellaneous - Reports to Parliament

AI-assisted research summary: The Minister responsible for finance must submit a report to Parliament at least once every six months on steps taken to implement the Act.

Section Reports to Parliament Section The Minister responsible for finance shall, at least once in every six months, submit a report to Parliament on the steps taken to implement this Act.
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Miscellaneous - Primacy of this Act

AI-assisted research summary: Acts done under this Act to give effect to the Government’s policy on reform and divestiture of public enterprises have effect notwithstanding any other enactment; where a provision of any enactment conflicts with a provision of this Act, the Act prevails over the other provision.

Section Primacy of this Act Section Anything duly done under the authority of this Act for the purposes of giving effect to the Government’s policy on reform and divestiture of public enterprises shall have effect notwithstanding any other enactment. Where any provision of any enactment conflicts with any provision of this Act, the latter shall prevail over the former.
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Miscellaneous - Application of Investment Code

AI-assisted research summary: A company in Uganda created or existing because of divestiture may, with approval from the Uganda Investment Authority, receive incentives under the Investment Code as if it had commenced operations after that Code began.

Section Application of Investment Code Section A company established or existing in Uganda as a result of divestiture under this Act shall with the approval of the Uganda Investment Authority be eligible for incentives under the Investment Code, as if it were a company which commenced operations after the commencement of that code.
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Miscellaneous - Regulations

AI-assisted research summary: The Minister responsible for finance may make regulations (by statutory instrument and with committee approval) to give effect to the Act; such regulations bind affected public enterprises and may prescribe a fine not exceeding five million shillings for contraventions.

Section Regulations Section The Minister responsible for finance may, by statutory instrument , with the approval of the committee , make regulations for giving full effect to the provisions of this Act. Without prejudice to the general effect of subsection (1), regulations made under it shall bind any public enterprise affected by it notwithstanding any existing enactment applicable to the public enterprise . Regulations made under this section may prescribe as a penalty for the contravention of the regulations a fine not exceeding five million shillings.
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Miscellaneous - Amendment of Schedules

AI-assisted research summary: The Minister responsible for finance may amend the First or Second Schedule by statutory instrument with Cabinet approval; the Minister must lay instruments before Parliament, and an instrument is not effective unless approved by Parliament.

Section Amendment of Schedules Section The Minister responsible for finance may, with the approval of the Cabinet, by statutory instrument , amend the First or Second Schedule to this Act and may, in particular, in the case of the First Schedule— delete an enterprise or insert a new enterprise; or transfer an enterprise from one class of the Schedule to another. The Minister responsible for finance shall lay before Parliament any statutory instrument made under this section, and the statutory instrument shall not be effective unless approved by Parliament.
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Miscellaneous - Amendment of Third and Fourth Schedules

AI-assisted research summary: The Minister responsible for finance may amend the Third and Fourth Schedule to this Act by statutory instrument with the approval of the Cabinet.

Section Amendment of Third and Fourth Schedules Section The Minister responsible for finance may by statutory instrument with the approval of the Cabinet amend the Third and Fourth Schedule to this Act.
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Miscellaneous - Departed Asians’ Property Custodian Board legislation not affected

AI-assisted research summary: This Act does not detract from enactments concerning the treatment of properties falling under the Departed Asians’ Property Custodian Board.

Section Departed Asians’ Property Custodian Board legislation not affected Section Nothing in this Act shall detract from any enactment concerning the treatment of properties falling under the Departed Asians’ Property Custodian Board.
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Miscellaneous - Saving of private rights

AI-assisted research summary: Divestiture under this Act must not prejudice the right of any person who has suffered damage to obtain fair, adequate and prompt redress for that damage.

Section Saving of private rights Section Any divestiture under this Act shall not prejudice the right of any person who has suffered damage from obtaining fair, adequate and prompt redress in respect of the damage.

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