Uganda’s oldest listed companies, Uganda Clays and Bank of Baroda, are looking to see how the economy survives and recovers from effects of the global pandemic.
As the region was coming to terms with the coronavirus in March, Uganda Clays and Bank of Baroda were instituting critical management changes that took investors by surprise.
Uganda Clays sacked a number of senior managers in March on grounds of poor performance and allegations of insider fraud following weak financial results posted during the first six months of 2019. Bank of Baroda similarly announced the appointment of a new managing director and entry of new directors in the aftermath of poor earnings registered last year.
Earlier, Uganda Clays had issued a cautionary announcement that the company’s managing director George Inholo and the heads of human resources and production, respectively, had left the company by mutual consent. The company is yet to replace these executives.
Although the exit of the senior managers appeased disgruntled UCL investors, the effects of the pandemic on the general economy are likely to complicate matters for the incoming ones assigned to execute a commercial turnaround strategy as the company struggles to satisfy changing market needs.
UCL’s share price has since recovered to Ush9 ($0.0024), but stockbrokers feel it could slide in the second half of 2020 as desperate investors seek to exit the counter on account of growing frustration over its performance.
Richard Byarugaba, the managing director at the National Social Security Fund of Uganda and a UCL director said; “Production at the Kamonkoli has never reached optimal levels while the Kajjansi factory still produces more but is archaic. The quality of management and systems at UCL have proved wanting for a long time and have discouraged many potential buyers of our shares. Our turnaround objectives were never achieved under the former managers.”
The NSSF is UCL’s majority shareholder with a 32 per cent stake.
Whereas UCL requested for an extension from the Uganda Stock Exchange to publish its 2019 full year results outside the April 30 reporting deadline citing lockdown-related constraints, the financial results for December 2019 were yet to be published by this month.
Baroda managing director Ashwini Kumar was replaced by Raj Kumar Meena in March, and Rajneesh Sharma resigned from the board of directors and replaced by Dr Mudumba Krishnama Chary as a non-executive director.
Shanti Lal Jain was also appointed non-executive director of the bank.