By Spy Uganda
Kampala: As we report this, it’s a bad evening for the proprietors of Simbamanyo Estates Ltd after the court of appeal trashed their appeal case that was challenging paying to the Equity Bank legal costs after withdrawing the first case against auctioning of its prime properties to Uganda’s mogul Sudhir Ruparelia to recover loans worth $10.8 million (about Shs40 billion).
To confirm how bad it is for the Simbamanyo’s, Justice Christopher Madrama ruled that since they did not have enough evidence to present to the court to deny the bank legal costs incurred, the judge ruled that, Equity Bank lawyers will now have to file a bill of costs to be approved by the court.
Justice Madrama also ruled that stopping the sale would have infringed the Bank’s right to be heard and also inconvenienced those who prepared for the auction which was advertised on September 8 fixing the sale date.
“The application for withdrawal was not conceded to unconditionally but was on condition of payment of costs. In the circumstances, therefore, the applicant (Simbamanyo Estates) application stands dismissed upon withdrawal and the only issue for consideration is whether should be payable,” Justice Madrama held.
Background Of The Case
According to the bank details, the two entities of Equity Bank Uganda and Equity Bank Kenya contributed money together of $3.5m and $2.5m respectively of which Simbamanyo Estates challenged saying that it only considered $7.19m (Shs26.48b), hence accusing Equity Bank Uganda of conniving with Equity Bank Kenya to illegally carry business in Uganda where it has no jurisdiction.
Simbamanyo contended that it started servicing the loan but required more financing, which culminated in two additional facilities granted by Equity Bank Uganda of $1.2m (about sh4.3b) for the completion of the construction of a hotel at Mutungo, a Kampala suburb, and to take over a prior facility from Shelter Afrique hotel.
In addition, the estate company noted that Equity Bank Uganda and Kenya brokered a new deal with Bank one, a Mauritius-based bank, to lend $10m (sh36b) to it to pay the old loan with Equity Bank lenders.
In fear of the impending adverse actions at the time, Simbamanyo says it accepted the Bank one loan offer, which was made on November 16, 2017, to bridge $10m Mauritian loan for purposes of refinancing the existing loans for a period of 24 months.
“Following the Mauritian loan, Equity Bank made a corresponding but fictitious bi-party loan offer for the same amount and tenure to the plaintiff,” the document reads, adding that the fictitious loan amounted to fraudulent misrepresentation by Equity Bank.
Putting the estate’s dissatisfaction aside, on August 7 and 11 this year, the bank advertised the sale of the two properties by way of public auction. The advert for sale of the mortgaged properties intended to enforce the disputed credit facility advanced on November 30, 2017.
This is how Equity Bank sold the property to Sudhir’s Meera Investments Company Limited at a whopping $5million approx. (shs18.5 billion) in an effort to recover Bank’s unpaid loan amounting to about $8.1million (approx. Shs30billion).
“Yes, it’s true I bought Simbamanyo building at USD5m cash after I emerged the highest bidder,” Sudhir told this reporter on phone last week.