Equity bank Vs Simbamanyo Shs40b loan battle kicks off
Simbamanyo House in Uganda's capital, Kampala. PHOTO /COURTESY
What you need to know:
On August 7 and 11, the bank advertised the sale of the two properties by way of public auction. The advert for sale of the mortgaged properties seeks to enforce the disputed credit facility advanced on November 30, 2017. Simbamanyo Estate sued Equity Bank and its counterpart in Kenya, challenging the legality of the outstanding loan. The case is pending hearing and determination before the Commercial Division of the High Court.
T he Court of Appeal will today hear an application in which the proprietors of Simbamanyo Estates Limited are seeking to stop the takeover of its multi-billion property on Lumumba Avenue in Kampala.
They are seeking orders to maintain the status quo stopping the sale of their property by Equity Bank, which is seeking to recover $10.8m (about Shs40.1 billion) of loans.
In the application before Justice Christopher Madrama, the proprietors of Simbamanyo Estates are also seeking to halt a High Court order that required them to pay 30 per cent of the outstanding loan of Shs12b.
However, the hearing of the application comes hardly a week after the bank announced that it had sold the Simbamanyo building which is housing, among others, the Ministry of Gender to Meera Investments Limited owned by businessman Sudhir Ruparelia. The new landlord is fully in possession.
“All tenants were put on notice of the said auction via an advert in the Daily Monitor newspaper dated September 8,” reads the notice signed by the bank’s managing director, Mr Sam Kirubi, in an October 8 notice.
The bank added: “We trust you will accord the new owners all courtesy and all future rental payments and other tenant inquiries and obligations will be handled by Meera Investments Limited or their agents.”
The bank sold the building after Simbamanyo Estates failed to pay the Shs40.1b loan. The development comes after the building was auctioned by the bank for recovery of the loan.
Through their lawyers of Muwema and Company Advocates, the firm insists that they appealed against the payment of 30 per cent which was being claimed by the bank and that the appeal is yet to be fixed for hearing.
Court documents indicate that upon issuance of the High Court order on September 7, the bank advertised their property and were finally sold on October 8.
“There is an imminent threat and danger that the applicant’s said properties will be sold off and thereby prejudice the pending appeal unless the respondents are restrained,” reads part of the court document.
The properties were guaranteed to Equity Bank Uganda as security to get the loan in November 2017.
Simbamanyo Estate had sought to halt the intended sale.
