Wakilii

Crooze FM SMC Limited v Bakashaba Christopher and Another (Miscellaneous Application 614 of 2025)

High Court · [2026] UGHCCD 29 · 2026 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for orders to compel handover of company management and accounting following share transfer
Decision
Application partially allowed; respondents ordered to hand over company management to majority shareholder; accounting claim dismissed for determination in ordinary suit

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that a majority shareholder holding 90% of shares in a company is entitled to control management under both the shareholder majority principle and the terms of the share transfer agreement. The court ordered respondents to hand over management but declined to order accounting for income, holding that allegations of misappropriation involving fraud require determination through an ordinary suit with oral evidence, not affidavit evidence in a miscellaneous application.

Outcome

Application partially allowed; respondents ordered to hand over company management to majority shareholder; accounting claim dismissed for determination in ordinary suit

Facts

Crooze FM SMC Limited purchased 90 shares in Radio 5 FM Limited from Bakashaba Christopher on 19 September 2024, becoming the majority shareholder with 90% ownership. The share transfer agreement vested management and control in the purchaser. The Registrar of Companies was ordered to effect the share transfer on 31 March 2025 in Miscellaneous Cause No. 7 of 2025. Despite the transfer, the respondents refused to hand over management and control of the company. The applicant sought orders compelling handover and requiring the respondents to account for income earned from 20 September 2024. The respondents alleged the applicant had temporarily managed the company for three months and misappropriated UGX 104,507,000.

Issues

  1. Whether the applicant is entitled to an order against the respondents to hand over management of Radio 5 FM Limited.
  2. Whether the applicant is entitled to an order against the respondents to account for income earned by Radio 5 FM Limited from 20th September 2024 to date.

Orders

  • The respondents (Bakashaba Christopher and Atuhaire Carolyne) shall hand over management of Radio 5 FM Limited to the applicant (Crooze FM SMC Limited).
  • Each party shall bear its own costs.

Rules and key headnotes

Company Law — Shareholder Majority Principle — Management Control
Under the shareholder majority principle established in Foss v Harbottle, a majority shareholder holding 90% of shares in a company is entitled to control the management of that company, and courts will enforce this right where minority shareholders refuse to relinquish control.
Contract Law — Share Transfer Agreements — Management Rights
Where a share transfer agreement expressly vests management and control of a company in the purchaser upon payment for shares, the agreement binds the vendor to hand over management, and the court will enforce this contractual obligation.
Civil Procedure — Affidavit Evidence — Fraud and Misappropriation
Where there is a contentious dispute involving allegations of fraud, forgery, or misappropriation of funds, the claimant must commence an ordinary suit to allow full investigation through oral and documentary evidence, as affidavit evidence in a miscellaneous application is not suitable for determining such matters.
Company Law — Shareholder Majority Principle — Statutory Recognition
The Companies Act Cap. 106 recognises the shareholder majority principle through provisions allowing majority shareholders to call meetings, pass special resolutions, and agree to compromises or arrangements, reflecting the general principle that company decisions are taken by majority vote.
Administrative Law — Preliminary Objections — Jurisdiction and Technicalities
Under Article 126(2)(e) of the Constitution and Section 37 of the Judicature Act, the High Court is charged with addressing the substance of disputes and not dwelling on technicalities, and preliminary objections that do not go to the root of the dispute will be overruled.

Legislation cited (6)

Cases cited (4)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Crooze FM SMC Limited v Bakashaba Christopher and Another (Miscellaneous Application 614 of 2025) [2026] UGHCCD 29 (6 February 2026)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.