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Uganda Telecom faces liquidation over Shs22b fees

9-April-2012

Uganda Telecoms Limited (utl) has been given a 21-day ultimatum to clear more than Shs22 billion as outstanding payment for interconnection fees.

The money accumulated from three court orders resulting from cases in which MTN Uganda dragged utl to court over interconnection fees. Interconnection fees result from users calling across networks.

“This is to demand that you pay to our client (MTN Uganda) the said sum and costs immediately or compound our client or give a charge over property to secure the payment of the said debt to the satisfaction of our client,” reads the March 20 letter addressed to utl managing director Donald Nyakairu.

MTN through their attorneys, Kampala Associated Advocates (KAA), say should utl fail to pay the said money, the matter will be taken to court for winding up of defaulter.

Liquidation process
The demand notice is the first legal step in the winding up process of utl. Mr Joseph Masiko, a senior partner with KAA, confirmed the developments but declined to divulge into the matter.

“We have firm instructions to liquidate utl, which has failed to pay judgement debts due to MTN,” he said in a telephone interview.
But Mr Nyakairu downplayed the demand, saying it is an internal matter they are handling.

“It is an internal arrangement that we are discussing because those are historical debts. Such a story is not in interest of any party. It will only create uncertainty and panic among our clients and employees,” he said in a telephone interview.

Mr Nyakairu said utl has paid all current dues and the debts will be paid in due course. This is the second time MTN Uganda is asking utl for controversial fees. Last year, MTN threatened to block calls to utl over the dispute that arose in June 2010.

By EPHRAIM KASOZI: The Monitor Newspaper

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Apr 18, 2012
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star 		UTL promises to pay MTN's 22 Billion
by: Anonymous

12-April-2012

Uganda Telecom Limited boss has acknowledged that his company owes MTN Uganda Shs22 billion , but said it is a historical debt that shall soon be cleared.

“This debt covers the period 2007 to 2010. Discussions have been ongoing on how this debt would be settled and we are confident the two parties (MTN and UTL) will come to an agreement,” a statement sent to Daily Monitor yesterday read in part.

UTL Managing Director Donald Nyakairu said the company had taken the initiative to meet its interconnect fees for 2011 and partly 2012 amounting to Shs14 billion, an indicator that they shall be able to meet their outstanding old debts.

Origin
This followed a formal demand notice from MTN’s legal office issued to UTL last month, giving the company a 21-day ultimatum to clear more than Shs22 billion as outstanding payment for interconnection fees to MTN.

The money accumulated out of three court orders resulting from cases in which MTN Uganda dragged UTL to court over interconnection fees to MTN resulting from users calling across the two networks.

UTL also owed Airtel Shs8 billion, but has since cleared part of it.

MTN Board speaks
MTN’s Board Chairperson Charles Mbiire confirmed to this newspaper that UTL indeed promised to clear its debt and said they attached the delay of payment to United Nation’s freezing of all Libyan Assets that largely brought in a big income to the telecom company.

“We came to a mutual understanding in a meeting held about two weeks ago with the chairperson of LAPGreenN, the mother company of UTL, in fact they made an initial payment of shs3billion,” Mr Mbiire said.
UTL’s majority shareholder is UCOM, a subsidiary of LAPGreenN.

Libyan factor
With the end of the crisis in Libya, the company hopes to reorganise itself financially so as to remain vibrant in the communication industry.

MTN, through their attorneys, Kampala Associated Advocates, had earlier told this news paper that should UTL fail to pay the said money, the matter would be taken to court for winding up of UTL.

But UTL denied allegations of liquidation, saying they are working to have all their debts cleared, with both MTN and Airtel, a telecommunication company.

“The interconnection debt due to us by Airtel has now been reduced from Shs8 billion to Shs1 billion and we hope to extinguish it by end of April 2012,” UTL said.

By Flavia Nalubega: The Monitor Newspaper

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