Court orders private criminal prosecution of Bitature, wife

The Criminal Division of the High Court in Kampala has ordered the commencement of a private criminal prosecution of businessman Patrick Bitature and his wife with fraud charges in connection with an unpaid loan borrowed from a South African company, Vantage Mezzanine Fund.

According to the orders of Justice Rosette Comfort Kania of January 8, the private criminal prosecution of the businessman and his wife Carol Nzaro should start with the sanctioning of the charge sheet within five days from the date of her ruling. The judge was asked to intervene after the Chief Magistrate’s Court at Buganda Road failed to grant the orders. 

“In the premises, I set aside the learned trial magistrate’s decision in criminal miscellaneous application no. 38 of 2022. On perusal of this court and of the lower court, I find an inordinate delay in concluding this matter. I find it necessary to remind the lower court of the dictate of Article 126 (2) (b)… justice shall not be delayed.” ruled Justice Kania.

She added: “On the basis of Section 33 of the Judicature Act, which vests power in this honourable court to grant any remedy on such terms and conditions as it deems just, or to cause a matter to be completely and finally determined, I order the Chief Magistrate of the Chief Magistrate’s Court at Buganda Road to sanction the charge sheet and any attendant document within five business days from the date of this decision.”

The South African firm, acting through their lawyer Robert Kirunda, zeroed down on fraud charges against the Bitatures based on Section 309 of the Penal Code Act that provides that any person who conspires with another or any fraudulent means to affect the market price of anything publicly sold, or to defraud the public, whether a particular person or to extort from any person commits an offence.

According to court pleadings, it’s alleged that on or about December 11, 2014, at Diamond Trust Building on Kampala Road, Simba Properties Investment Company, a company owned by Mr Bitature and his wife Carol, borrowed$10m (about Shs360b) from Vantage Mezzanine Fund.

The Bitatures in turn, offered their shares in several of their companies such as Linda Properties Ltd, Elgon Terrace Ltd, Simba Properties Investment Company Ltd and Simba Telecom Ltd, collectively referred to as Simba Companies. The case rests on the allegation that the couple, with full knowledge and intent to defraud the South African company and other creditors, altered the shareholding of Simba Companies.

This, the lenders claim, was in contravention of Section 323 of the Penal Code as they allegedly committed fraud contrary to Section 323, and issued false annual returns in respect of the companies contrary to section 309.

“They (the Bitatures) did this by executing various legal documents at the law offices of MMAKS Advocates, located in Nakasero, at their company premises located in Kololo, and filing and registering various company documents with the Uganda Registration Services Bureau,” the court documents read in part.

“It is the applicant’s contention that the suspects so conducted themselves with malice aforethought and with intent to defraud both the complainants and the public.”

This is the latest instalment in a long-running fight by the lenders to recover their money. An independent arbitrator in London last year ruled in favour of the lenders and ordered the Bitature’s to pay about $65m in principal, interest and penalties, and costs.

The fight then shifted back to Ugandan courts last year with the lenders accusing the Bitatures of trying to defeat their award by diluting their shareholding and seeking to cancel the mortgages offered to secure the loan. 

The latest ruling came after a lower court at Buganda Road disallowed the application for the said private prosecution. The magistrate at the lower court ruled that the court didn’t have the jurisdiction to commence private prosecution against the Bitatures and that the private prosecutor had not established a prima facie case of commission of an offence by the suspects.

The South African company appealed, leading to the January 8 High Court decision. By press time yesterday, it wasn’t clear whether the Chief Magistrate had complied with the order to sanction the private criminal prosecution.

Justice Kania argued in her ruling that the alleged crime is a white-collar one, which would not be appreciated by a layman like a local area chief where Bitature resides.

The judge reasoned that white-collar crime requires a high sophistication level to decipher as the same are not common crimes such as assault, theft, murder or threatening violence, which are in a category that is easy to appreciate.

“For a learned trial magistrate to base a finding of lack of establishment of a prima facie case on the fact that the local chief expressed ignorance of knowledge of the alleged offences is tantamount to miscarriage of justice.” Justice Kania held.

“Times have changed, [and] the nature of crimes has changed with times. In my view, it defeats justice for the learned trial magistrate to anchor her decision on whether or not the complaint establishes a prima facie case on consultation with the local chief, who with due respect is a layman, incapable of having access to the information required to have knowledge about the alleged crimes which are a subject of this application.”

The judge observed that the actions of the Bitatures in altering the shareholding of Simba Companies, and preparing annual returns indicating Nil indebtedness with respect to annual returns of Elgon Terrace Hotel, Simba Telecom Ltd, and Simba Investment Ltd, creates a situation where they are required to explain.

A private prosecution is a criminal proceeding initiated by an individual private citizen or private organisation (such as a prosecution association) instead of by a public prosecutor who represents the state (Director of Public Prosecutions).

Section 42 (1) c of the Magistrates Courts Act provides that criminal proceedings may be instituted by any person, other than a public prosecutor or a police officer, who has reasonable and probable cause to believe that an offence has been committed by any person may make a complaint of the alleged offense to a magistrate who has jurisdiction to try or inquire into the alleged offence, or within the local limit of whose jurisdiction the accused person resides.

Every such complaint may be made orally or in writing and signed by the complainant, but if made orally, it shall be reduced into writing by the magistrate and when so reduced, shall be signed by the complainant.

Further, Section 42 (4) provides that upon receiving a complaint, under sub section 3, the magistrate shall consult the local chief of the area in which the complaint arose and put on record the gist of that consultation, but where the complaint is supported by a letter from the local chief, the magistrate may dispense with the consultation and thereafter, put that letter on record.

Section 42 (5) demands that after satisfying himself/ herself that there is a prima facie commission of an offence and that the complaint is not frivolous, the magistrate shall draw up and sign a formal charge sheet containing a statement of the offense alleged to have been committed by the accused person/s.

While ruling on the contestation that the Grade One Magistrate at Buganda Road Court didn’t have the jurisdiction to handle the private prosecution, Justice Kania held that since the maximum punishment for fraud is seven years, the court has the jurisdiction.

“The offences under Sections 309, 323 and 324 of the Penal Code Act attract the maximum penalty of imprisonment for seven years. The magistrate’s court, therefore, has the subject matter jurisdiction to try the offences,” she held.

“Consequently, having determined that the complaint satisfied the jurisdictional condition set out in section 42 (3), the Magistrates Courts Act, I find that the Trial Magistrate had jurisdiction to try the matter and the matter fell squarely within the jurisdiction of the Chief Magistrates Court of Kampala at Buganda Road.