When Natural Food Industries was incorporated on March 12, 1979, Neema Sheba Bagalaaliwo was among six people who subscribed to the company.
Each held one share in a business whose initial share capital stood at Shs500,000.
Nearly five decades later, the original incorporation documents still carry her name. But somewhere along the company’s long corporate journey, the shareholder herself disappeared from subsequent records.
There is no single resolution on the company file expressly removing her.
There is no definitive document showing when she ceased being a member. Instead, her name appears to have progressively vanished through a succession of filings spanning years.
How that happened has now developed into an ownership dispute involving share allotments dating back to 1997, transfers made in 2005, disputed corporate records and allegations of forged signatures.
After examining the paper trail, Uganda Registration Services Bureau (URSB) could not authoritatively determine who legitimately owns shares in Natural Food Industries today.
In a September 3 ruling, Assistant Registrar of Companies Daniel Nasasira sent the dispute to the High Court, reasoning that determining the company’s true membership would require adjudicating contested ownership rights that fall outside the Registrar’s powers.
For Bagalaaliwo, the ruling leaves her in an unusual position. Although the paper trail shows she has been an original shareholder of Natural Food Industries since 1979, URSB cannot determine administratively how she later disappeared from its records.
Company documents examined by Nasasira show Bagalaaliwo alongside Mohammad Magid Bagalaaliwo, El-Bam Bashir Bagalaaliwo, Summayah Nakakawa, Faridah Marvel Nabalozi and Adlan Naluyo as the original subscribers, each holding one share.
But in a petition, Bagalaaliwo told URSB that she discovered she had been removed as a shareholder, yet she had never forfeited or transferred her shares and that other people had been added to the company without her knowledge, consent or participation.
However, the other shareholders presented a different account, denying removing Bagalaaliwo and said Natural Food Industries had remained dormant from 2005 until 2024, when URSB’s company data update exercise prompted its revival.
They argued that if Bagalaaliwo had disappeared from the records, it was because of administrative anomalies in the URSB system rather than deliberate action on their part. But determining what actually happened required Nasasira to travel much further back through the company’s records.
Natural Food Industries began in 1979 with share capital of Shs500,000, divided into 500 ordinary shares valued at Shs1,000 each.
But that structure changed dramatically after 17 years. Documents on the company file show that on June 28, 1996, its nominal capital was increased from Shs500,000 to Shs500m, divided into 500 ordinary shares worth Shs1 million each.
Then came a transaction that would become central to the current dispute. A return of allotment executed on March 12, 1997, but filed on January 13, 2005, allocated 495 of the company’s 500 ordinary shares. Muhammad Magid Bagalaaliwo received 273 shares while Sarah Bagalaaliwo received 222.
Another significant change followed in 2005. According to a resolution filed on January 13 that year, Muhammad Magid Bagalaaliwo transferred his 273 shares to Malvia Roshankumar Himatbhai, while Sarah Bagalaaliwo transferred her 222 shares to Dave Gaurang Vijaykumar.
The two incoming shareholders were appointed directors, while Muhammad Magid Bagalaaliwo and Sarah Bagalaaliwo ceased to be shareholders and directors, according to the resolution.
The two transactions are now crucial because Bagalaaliwo disputes the foundations upon which they rested, challenging the 1997 allotment and arguing that the existing shareholders were not first offered the shares through their pre-emption rights as required under the company’s Articles of Association.
She further argued that there was no resolution, deed of surrender or transfer instrument establishing that she had ceased being a shareholder or surrendered those rights.
Undoing the 1997 transaction, however, could potentially affect subsequent transactions.
In its ruling, URSB noted that challenging that allotment indirectly raised questions about the later membership of Himatbhai and Vijaykumar, who acquired shares arising from subsequent transfers.
What appeared initially to be a request to restore one shareholder’s name had, therefore, become a much larger question about the company’s ownership history.
How did Bagalaaliwo disappear from records?
Nasasira’s examination of the company file found no definitive filing or resolution removing Bagalaaliwo as a member.
Instead, company records showed that her disappearance occurred gradually. Following the disputed 1997 allotment, Bagalaaliwo and some other original shareholders were purportedly excluded as members.
But the names of some of those shareholders later appeared again in documents filed from 2005 onwards. Bagalaaliwo did not.
Nasasira concluded that her exclusion resulted from ‘a succession of filings that progressively altered records, culminating in her omission from the register.’
But establishing who was responsible for those filings, and whether they legally changed ownership, proved considerably more difficult.
Forgery claims enter the dispute
Bagalaaliwo told URSB that after discovering the changes, she approached Bashir Mohammed Bagalaaliwo, one of the original subscribers, seeking information about the company’s affairs.
According to her statutory declaration, Bashir told her that his signature and that of another original subscriber, Mohammad Majid Bagalaaliwo, had been forged during the company update process.
The ruling records that the two subsequently lodged a complaint at Jinja Road Police Station, but URSB did not determine that forgery occurred.
Intriguingly, another person whose name appeared in the disputed records also disowned her supposed ownership.
The fifth respondent, Naseeba Bagalaaliwo Nakato, told URSB that she had never attempted to register, re-register or revive Natural Food Industries and had never participated in its business.
She said she had never been a shareholder and that any company record depicting her as one was inaccurate and that any signature attributed to her on company records was a forgery placed there without her knowledge or consent.
Where URSB’s powers end
By this stage, what started as Bagalaaliwo’s attempt to have her shareholder status restored had opened questions stretching across nearly three decades of corporate transactions.
Was the 1997 allotment lawful? Were existing shareholders entitled to exercise pre-emption rights? Were the 2005 transfers valid? Was the resolution authorising them genuinely passed? And were later annual returns, beneficial ownership filings and other documents lawfully prepared and filed?
Nasasira ruled that answering those questions would require more than comparing documents sitting on the Companies Register.
It would require witnesses, documentary evidence and determination of competing legal rights.
Under the Companies (Powers of the Registrar) Regulations, the Registrar can correct or expunge documents where defects are objectively apparent from the record.
But Nasasira found that the Natural Food Industries dispute crossed that boundary.
The questions surrounding the 1997 allotment, the 2005 transfers and the company’s membership required substantive judicial determination.
URSB therefore ruled that it lacked jurisdiction to determine the legality of the contested share transactions, establish the company’s lawful membership or expunge the disputed documents.
That job now belongs to the High Court.
Under the Companies Act, the court can determine whether someone’s name was entered into or omitted from a company’s register without sufficient cause and order the register corrected.
Unlike the Registrar, court can receive oral and documentary evidence, examine disputed transactions, test the credibility of witnesses, and conclusively determine ownership rights.
Nasasira consequently dismissed Bagalaaliwo’s application for want of jurisdiction, with no order as to costs.
But the dismissal does not settle the underlying ownership battle.
Instead, 47 years after Natural Food Industries was incorporated, its original paperwork establishes that Bagalaaliwo was there at the beginning.
What happened to her shareholding afterwards, and what that means for the company’s ownership today, is a question URSB says only court can now answer.