Inside Lubega, Muhangi fight over Baganda Bus Park land

Tuesday April 16 2019

Disputed. Qualicell building in downtown

Disputed. Qualicell building in downtown Kampala whose ownership is contested by several businessmen. Traders operating in the building have suffered losses due to constant closures of the structure. PHOTOs BY ABUBAKER LUBOWA 

By Tom Malaba

Former motor rally champion Charles Muhangi was found dead in his bed at his home in Buziga, a Kampala suburb.
His death last December cast a dark shadow on resolving a row over ownership of the 0.518-hectare piece of land on which Qualicel Bus Terminal, Qualicel building and Nabukera Plaza were built. This area was once known as Baganda Bus Park in downtown Kampala.

On the day he died, he was due to meet President Museveni alongside city tycoons Drake Lubega and Mansur Matovu. Two months after his death, police, ostensibly acting on orders of Deputy Attorney General Mwesigwa Rukutuna, evicted Muhangi’s Horizon Coaches and handed the property to Mr Lubega and Mr Matovu, as the owners.

Yet on various occasions, police and the office of the Attorney General have authored letters of contradictory opinion.
In February, the Police Director for Legal Affairs, Mr Erasmus Twaruhukwa, wrote to the Kampala Metropolitan Police Commander, instructing him to evict Muhangi’s Horizon Coaches from the property.
This letter was premised on a meeting he held with Mr Rukutana.

“The purpose of this communication is to relay position of the matter, which is that Lubega should be in possession of the premises in question as the matter of ownership awaits court’s jurisdiction. The matter, therefore, is to instruct that you ensure that possession of the premises returns to Mr Lubega. Any property that is aggrieved by this decision is advised to seek court redress,” Mr Twaruhukwa wrote.
He had earlier asked the Kampala Metropolitan Police Commander in a September 26, 2019, letter to maintain the status quo, with Muhangi’s Horizon coaches as the sitting landlords.

“In the meantime, you will ensure that status quo reverts to what it was before receipt of my instructions of my letter of January 24, 2019 and that from the office of the Attorney General dated January 23 by ensuring that Horizon Coaches takes repossession of the premises,” he said.
Horizon Coaches has been feuding with the duo over ownership of the property for almost a decade.
In 2011, the late Muhangi petitioned the President who directed the Lands ministry to look into the matter.

The ministry constituted a committee, which recommended that, “UBOA [Uganda Bus Operators Association] did not possess the powers to divest Horizon Coaches of its shares. The officers of UBOA took the law in their hands to divest Horizon Coaches of its shares and consequently the land it was supposed to own”.
According to the committee’s report, Mr Godfrey Nangumya, the late Muhangi’s lawyer, during hearings, claimed that Horizon Coaches embezzled Shs1.6b.


Upon receiving the report, President Museveni on July 2011 advised the Lands ministry to cancel all titles on the disputed land if they were fraudulently acquired.
Mr Lubega petitioned the Constitutional Court, arguing that the President did not have powers to cancel the titles.

The Constitutional Court dismissed the case on grounds that the wording in the President’s letter of cancelling the titles, if they were acquired fraudulently, “did not appear to meet the definition of a directive or an instruction”.
In April 2015, the Constitutional Court ordered Mr Lubega to respect the status quo where Muhangi remained the landlord. The court said the eviction of Horizon Coaches in March 2014 was unlawful.

In 2017, a panel of Supreme Court judges led by Jotham Tumwesigye dismissed an appeal in which Mr Lubega was challenging the Constitutional Court verdict.
But in February this year, Mr Twaruhuka wrote to the Metropolitan Police Commander to evict Horizon Coaches from the property, two months after Muhangi’s death.

Tenants go to court
Fed up with this state of affairs, a group of 292 tenants renting on the shopping malls under dispute two weeks ago sued their feuding landlords over the business wrangle that has led them to incur losses.
The tenants, in their suit before the High Court in Kampala, argue that the Supreme Court ordered that for the time being, Horizon Coaches remains in change of the property. But the new landlords are seeking rent arrears for five months retrospectively. They are also threatening to evict any trader who continues to pay rent to Horizon Coaches.

Yet more parties are seeking a slice of this property. The Departed Asians Property Custodian Board last month wrote to both Mr Lubega and the Uganda Bus Operators Association Investment Limited (UBOAIL), claiming the land and warning that any ongoing developments on it will attract a penalty of Shs1.8b.

Works. Ongoing construction works on the
Works. Ongoing construction works on the contested former Qualicel bus terminal land.

The genesis of the dispute dates back to 2002 when UBOAIL was granted a five-year lease on Baganda Bus Park on Plot 43 - 47, Nakivubo Road, by then Kampala City Council (KCC).
KCC, then headed by Mayor John Sebaana Kizito, demanded a Shs1b premium. UBOAIL directors Ceasar Tokuma, Muhangi and Mr Nangumya failed to raise this amount.

They approached Kobil Kenya to join the project to build the much-vaunted Baganda Bus modern terminal. Kobil staked Shs600m in exchange for 0.300 of an acre to build a petrol station. UBOAIL also took a Shs200m loan from dfcu Bank, secured with a title of Mr Tokuma’s house in Luzira. Another Shs200m was raised through the company’s operations.

Though UBOAIL promised to give Kobil land to build a petrol station as part of the modern bus terminal, KCC declined to approve the project.
UBOAIL was then required to reimburse Kobil’s funds, according to minutes of a board meeting held on December 15, 2005.
“Since we could not raise the money, we decided to sell part of the land to Kampala businessmen,” says Mr Nangumya.

Records at the Uganda Registration Services Bureau (URSB) show that UBOAIL Board of Directors on December 19, 2005 resolved to sell the land to Mr John Sebalamu and Mr John Bosco Muwonge to build commercial retail facilities as per the terms of development of the sub-lease between KCC and UBOAIL.
However, it is not clear how Mr Lubega came to own land on the adjacent plot where he built Nabukeera Plaza. Records from URSB show that there could have been a dispute between the promoters of UBOAIL.

Between 2001 and 2006, there were events in the company pointing to disagreement within the directors of UBOAIL. The peak of these internecine fights, resulted in a palace coup in the ruthless transport business where players often employ gamesmanship to succeed.

Lease of life
The new directors were Horizon Coaches for Muhangi, Lowi Road Ways Ltd owned by Mr Ceasar Tokuma, Kyn and Reyne Investment Ltd for Mr Nangumya, Asuman Junju and Sons Ltd for Asuman Junju, Kabonesa Investments Ltd for Mr William Akankwasa, Travelers Choice Ltd for Dan Kwatampora and Long Freighters for Mr Stephen Byaruhanga.

As of May 16, 2002, Muhangi had 225 shares and the rest of the directors had 20 shares each.
As the directors of UBOAIL fought over the property, Mr Lubega exploited the chink in UBOAIL’s armour to gain access to a bigger part of the Buganda Bus Park land and build an arcade. He then sold another piece of land to Mr Matovu.

On November 10, 2005, the board removed Horizon Coaches owned by Muhangi from directorship at the time he was imprisoned in Mbarara over a shooting incident. This was possible because officials with interest in the property bankrolled City Hall officials when Muhangi was in prison.
Muhangi, who was a signatory to the company, was replaced with Mr Tokuma, Mr Taremwa and Mr Byaruhanga, the company secretary, as joint signatories. Muhangi was also removed from the membership of the sub-committee of the board of directors tasked to oversee and ensure the implementation of the project for Baganda Bus Park.

According to Mr Nangumya, when KCC refused to okay the Kobil petrol station as part of the bus terminal, UBOAIL had to refund Kobil’s money. This is what he says led to the ejection of Muhangi. “The Kobil debt had accumulated to Shs1.1b. …seeing we were behind schedule, John Sebaana Kizito called us and said we were getting into a red zone, and advised that we invite businessmen to invest in the project,” says Mr Nangumya.

“That is how we sold land to Ms Christine Nabukeera, Mr Sebalamu and Mr Muwonge,” he adds.
However, Mr Nangumya says when they sold the land to Mr Sebalamu, he made a payment of a Shs2b to Horizon Coaches not UBOAIL.

“After receiving the money, Muhangi never paid Kobil and Cairo Bank. We removed him as chairperson, replaced him with Mr Tokuma and sold 0.69hectares of the land to Mr Lubega to redeem the shares we had pledged to Kobil,” he adds.

“That is when Muhangi started challenging that the portion to Mr Lubega should have remained with UBOAIL. The problem he had received money from Mr Sebalamu, which he never declared,” says Mr Nangumya.
But Muhangi’s family accuses Mr Nangumya of breaching a fiduciary duty by conniving with Mr Lubega to grab what belonged to his client while he was incarcerated.

Museveni intervenes
In 2011, Muhangi lodged a complaint with the President who directed Ms Getrude Njuba, the lands director at State House, to call for negotiations.
“In the meeting, Muhangi offered to pay Shs1.5b to the shareholders and another Shs5.5b as value for the land and he put it in writing,” says Mr Nangumya.

He adds that in the ensuing confusion, the bus park had been left with one Tom Smith Semuwemba and Mr Bosco Muwonge to run.
Mr Nangumya recalls that its then that Mr Lubega took advantage of the confusion to grab an extra 0.46hectares of the land.

“So the empty space (where Mr Lubega is building a new building) remained as a bus park,” he says.
In 2011, the UBOAIL Board gave Muhangi authority to recover the land from Mr Lubega. In the spirit of reconciliation, Mr Muwonge paid Shs600m but Mr Lubega refused,” recalls Mr Nangumya.
He adds that Mr Lubega did not stop at grabbing the land but took advantage and extinguished the interest of UBOAIL on the land.

“There is no transfer of title from UBOAIL to Drake Lubega. It is at that time that UBOAIL disappeared. What Muhangi was fighting for is registration.”
Mr Nangumya recalls a UBOAIL Board resolution in 2011 that appointed a four-man committee with Muhangi as chairperson. Mr Jjunju, Mr Stephen Byaruhanga and Mr Willy Sekubwa were the other members delegated to fight for the interests of the company on the land.

After an unsuccessful attempt to recover the land, in 2017, UBOAIL re-appointed the same committee to demand their share of the land from Mr Lubega, this time replacing Jjunju, who had passed on, with Mr Hamim Sentongo, the chairperson UBOA Central Ltd. UBOA Central Ltd held 12 per cent shares in UBOAIL, according to the Uganda Gazette records of December 22, 2017. However, a letter from Peter Nyombi, then Attorney General in 2010, stated that the land belonged to Mr Lubega.

“That on February 23, 2010, the property in question, now designated as Plot 50 – 52 Nakivubo Road was transferred into the names of Francis Drake Lubega. All available evidence that we have in our possession points to Francis Drake Lubega being the lawful owner of the land in question,” Nyombi wrote in a February 20, 2014 letter to the Inspector General of Police.
Mr Sentongo revealed to Daily Monitor that UBOAIL in 2017 registered a case with the Commission of Inquiry into Land Matters.

On October, 23, 2018, Mr Lubega was summoned by the Catherine Bamugemereire’s led-commission of inquiry. The probe team instructed the Registrar of Lands not to transfer the land.
Mr Sentongo said Mr Lubega destroyed properties as he tried to forcefully take over the land, compelling UBOAIL to place a caveat on it.
“We are claiming a part of Qualicel shopping centre and even where Mansur Matovu built was not his,” revealed Mr Sentongo.

To prove UBOAIL’s interest on the land, Muhangi on October 11 last year pledged to pay Mr Sentongo and Mr Sekuubwa 20 per cent of the total land value and for their destroyed properties.
Mr Lionel Muhangi, Charles Muhangi’s eldest son and one of the administrators of his father’s estate, however, says members of UBOAIL sold their interests to his father.

Lionel Muhangi showed Daily Monitor a copy of a memorandum of settlement dated December 2, 2007, which reveals that Muhangi paid Shs5b to UBOAIL after a mutual understanding where they agreed to sell and transfer the land for purposes of development.
According to the payment schedule, Shs4.4 billion was payment for the UBOAIL’s interest in the land, Shs900m was payment for UBOAIL’s indebtedness to Kobil while Shs300m was payment for expenses incidental to the memorandum of understanding.

The memorandum was signed by Mr Jjunju and Mr Byaruhanga as directors for UBOAIL while Muhangi and Fred Tumwine signed on behalf of Horizon coaches. However, this particular document was not filed with the Registrar of Companies.
Mr Sentongo contests the memorandum of settlement in the possession of Muhangi’s son, saying if Muhangi had bought the interests, he would not have accepted to be named as a member of a task-force to recover UBOAIL land.

“What I can tell him [Lionel Muhangi], let him join UBOAIL; his shares are safe in UBOAIL,” he says.
Currently, the main suit between Muhangi as the plaintiff against Mr Lubega and Mr Matovu as defendants is before the Commercial Division of the High Court.
The litigants can only hope that justice should not only be delayed but must manifestly be dispensed.

Muhangi factor

Petition. In 2011, the late Muhangi petitioned the President who directed the Lands ministry to look into the matter. The ministry constituted a committee, which recommended that, “UBOA [Uganda Bus Operators Association] did not possess the powers to divest Horizon Coaches of its shares. The officers of UBOA took the law in their hands to divest Horizon Coaches of its shares and consequently the land it was supposed to own”.

Additional reporting by Frederic Musisi