Equity Bank: We’re Selling Off Simbamanyo’s Disputed Property If It Exceeds October Without Our Money

Equity Bank, acting through Katende Ssempebwa & Co Advocate and AF Mpanga, Advocates, has said it will after October 7 proceed to sell properties contained in plots on Lumumba Avenue and Mutungo-Luzira, both within Kampala if Simbamanyo Estates fails to pay Shs11.5b.

In a notice published yesterday, Equity Bank said Simbamanyo had until October 7 within which it must pay at least 30 per cent of the disputed Shs38.6b, failure of which it will proceed to sell properties against which the money was advanced.

Simbamanyo had at the close of last month put a caveat on the disputed properties, noting Equity Bank was trying to upstage the court process in which it is challenging the sum in dispute and the legality of loans drawn from Equity Bank Kenya.

Simbamanyo is embroiled in a property dispute with Equity Bank Uganda and Equity Bank Kenya resulting from unpaid loans that had been advance to the real estate company.

A notice yesterday Equity said: “All potential buyers, tenants and occupants of the properties [contained in on Lumumba Avenue and Mutungo-Luzira]are informed that if Simbamanyo does not pay to the bank the 30 per cent as ordered by court, public auction of the mortgaged properties will take place on October 8.”

The plots currently have developed properties, including Simbamanyo House, which houses Gender Ministry on Lumumba Avenue and Afrique Suites Hotel in Mutungo-Luzira.

The notice followed a ruling in which the High Court on Monday upheld Simbamanyo’s prayer to stay the sale of the disputed properties, which Equity Bank had indicated in two separate notices on August 7 and August 11 would auction to recover outstanding sums.

However, court ruled that to prevent the intended auction, Simbamanyo must pay at least 30 per cent of the disputed amount.

In court

According to court documents filed in the Commercial Division of the High Court, on August 20, 2012, Equity Bank Kenya and Equity Bank Uganda entered into a loan agreement in which the two banks agreed to advanced Simbamanyo with $6m.

The loans, which would make up a consolidate sum of $8.10m (Shs29.83b) including interest and operational fees, among others, sought to finance the construction of Afrique Suites Hotel in Mutungo, Luzira north east of Kampala and facilitate the takeover of a prior facility advanced to Simbamanyo by Shelter Afrique.

The two banks, details indicate, pooled money together with at least $3.5m drawn from Equity Bank Kenya and $2.5m from Equity Bank Uganda.

However, Simbamanyo Estates is challenging the outstanding sum, saying it is only aware of $7.19m (Shs26.48b).

Simbamanyo Estates is also accusing Equity Bank Uganda of providing Equity Bank Kenya with an illegal cover to conduct business in Uganda where it has no jurisdiction.

The real estate company wonders how, according to court document, Equity Bank and Bank One, which provided bridge financing of ($10m) were drafted into the loan agreement yet Simbamanyo had never applied for any facility from the two banks later alone own a bank account in any of the said financial institutions.

However, in its defense, Equity indicates that Sambamanyo benefited and was aware of every financial transaction that was advanced to it.

Equity also argues that Bank One, based in Mauritius, was drafted into the transaction on the request of Simbamanyo, which had sought to obtain bridge financing of up to $10m.

Court documents indicate that Simbamanyo Estates had sought to offset the outstanding sum in a November 16, 2017 letter to Mr Samuel Kirubi of Equity Bank Group Kenya.

In the letter, Simbamanyo, acting through NISK Capital, sought to restructure the loan with a $10m Standby Letter of Credit secured from Bank One.

Therefore, Equity argues, Simbamanyo or its agent were fully aware of all transactions and the case it had filed in March was a “guise or scheme” to defer the performance of its financial obligation that it has since defaulted on.

Mr Kamya, acting through Muwema Co Advocates and Solicitors last month told Daily Monitor, Equity Bank had breached contractual trust and engaged in unethical and illegal conduct.

Absolute contempt of court process, says Simbamanyo Estates, acting through Muwema and Co Advocates and Solicitors, yesterday said: “We find it irregular to find that lawyers for the bank [Equity] are publishing a response to the caveat emptor and giving our client 30 days to clear 30 per cent and before this time elapses they have advertised the same properties for sale.”

“This is a continuation of the unethical and highhanded conduct of the bank (Equity),” Simbamanyo said, noting Equity is continuing to act in absolute contempt and disregard of court process in which they are challenging the bank on various illegalities.

Simbamanyo also noted there was still more time to handle the issue of the 30 per cent payment, saying there was need to study it further.

Credit: DM

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