“Due Process Of The Law Took Its Course Mr President”-BoU Responds To Museveni On Simbamanyo Ownership Saga

“Due Process Of The Law Took Its Course Mr President”-BoU Responds To Museveni On Simbamanyo Ownership Saga

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By Spy Uganda

Kampala: The central Bank of Uganda has issued a detailed report to the head of state President Yoweri Kaguta on the saga between Equity Bank and former Simbamanyo House owners who previously run to President for support to retrieve their sold properties to Uganda’s top tycoon Sudhir Ruparelia.

READ ALSO: You Should’ve Long Run To President Requesting Him To Clear Your Bank Loans Instead, But Not To Challenge The Sale: Tycoon Sudhir ‘Hammers’ Simbamanyo Ex Owners After Petitioning President To Retrieve Property!

The troubled property’s ex-owners Mr. Peter Kamya and Dr. Margaret Muganwa ran to President Museveni seeking intervention into the sale of their property by Equity Bank which prompted him to task Bank of Uganda boss Emmanuel Mutebile to investigate the matter.

Now, after investigations, BoU in its report says that between 2012-2014, the Simbamanyo estate owners took a loan in excess of $7.1 million before interest and secured the said facilities by mortgaging LRV 2220 Plot 2 folio Lumumba Avenue (Simbamanyo House) and properties comprised in Kyadondo block 243 Plots 95, 958,2794,17800 and block 237 Plot 95 land at Mutungo (Afrique Suites).

READ ALSO: Business Mogul Sudhir Ruparelia Renames Simbamanyo Building To Gender & Labour House

The report says in 2016 Simbamanyo defaulted on those loan facilities and to buy time filed HCCS No.544 of 2016 alleging that its accounts had been wrongly debited and therefore, it refused to make any further payments of its loan obligations. The report further says an independent report was undertaken by Ernest and Young showed that the discrepancy was a total of only $442.

“In mid-2017, Equity Bank Uganda Limited began foreclosure proceedings against Simbamanyo to recover the outstanding loan and Simbamanyo filed Miscellaneous Application No.1159 of 2017 seeking a temporary injunction stopping Equity Bank Uganda Limited from foreclosing and selling the mortgaged property” partially reads the report.

READ ALSO: Big Story! Commercial Court Officially Hands Over Simbamanyo, Afrique Suites Buildings To Doctor Sudhir After Dust-binning Kato’s Appeal!

In October 2017, Justice Billy Kainamura issued his ruling in the Miscellaneous Application No. 1159 of 2017 and, in accordance with the mortgage property Act, ordered Simbamanyo to deposit 30% of the outstanding loan amount otherwise Equity Bank Uganda Limited would be at liberty to sell of the mortgaged properties at a public auction after 30 days.

The report explains that in November 2017, Simbamanyo did not appeal against the ruling of Justice Kainamura but instead filed a Constitutional petition No.42 of 2017 Simbamanyo vs Attorney General and Equity bank Uganda Limited before the Constitutional Court challenging the legality of the ruling 13 of the Mortgage Regulations 2013 (The regulation which requires defaulting mortgagors to deposit 30% of the outstanding loan before they can stop a public auction pf the securities.

On November 16, 2017, Simbamanyo wrote to Equity Bank Uganda Limited and Equity Bank Kenya Limited informing them that it had appointed Nisk Capital as its advisors and that it had approached bank One Mauritius (Bank One) to get a two-year loan to refinance the existing loans with Equity Bank Uganda Limited and Equity Bank Kenya Limited and get additional funds to complete Afrique Suites. Bank One had stated however, that it needed Equity Bank Kenya limited to provide a Stand By Letter to Bank One a security for this loan. Equity Bank Uganda did not therefore foreclose on the properties.

READ ALSO: You’re Just Time Wasters: High Court Dustbins Simbamanyo Estates Appeal Case Against Equity Bank

On June 4, 2020, Equity Bank Uganda Limited issued a notice of default to Simbamanyo for its failure to service its loan obligations and declared its intention to foreclose and recover the loan obligations. On June 24, 2020, in response to the notice of default, Simbamanyo set down Miscellaneous Application No. 394 of 2021 seeking for a temporary injunction stopping Equity Bank Uganda Limited from foreclosing on the mortgaged properties.

The report further discloses that on July 4, 2020, in accordance with the Mortgage Act 2009, Equity Bank Uganda Limited retained an independent valuation firm which carried out an independent valuation of the mortgaged properties confirming that the forced sale value for Simbamanyo House was $4.6 million and Afrique Suites was $4 million.

On August 13, 2020, Simbamany then also filed Miscellaneous Applications No.601 2021 seeking for an interim injunction from court to stop the proposed sale by public auction of the mortgaged properties by Equity Bank Uganda Limited but on September 2, 2020, the High Court Registrar issued its ruling in Miscellaneous Application No.601 2021 and granted the application for interim stay on condition that Simbamanyo pays 30% of the outstanding loan amount of $10.5 million ($10,514,501).

In between September 2 and September 7, 2020, Simbamanyo then filed Miscellaneous Application No.678 of 2020 seeking for an interim stay of the orders of the Registrar authorizing the auction and Miscellaneous Application No. 679 of 2020 appealing against the decision of the Registrar.

Report further notes that on September 7, 2020 Miscellaneous Application No. 678 of 2020 came up for hearing the High Court upheld the ruling of the Registrar save that Simbamanyo was ordered to pay the 30% of the outstanding loan amount on or before October 7, 2020. Miscellaneous Application No. 679 of 2020 was adjourned at Simbamanyo’s request.

The report says on September 8, 2020, Equity Bank Uganda Limited through its lawyers in response to a Caveat Emptor advert placed in the New Vision by Simbamanyo, clarified to the general public that unless Simbamanyo made the court-ordered payment, it would proceed to sell the mortgaged properties by public auction on October 8, 2020. On the same day, September 8, 2020, in accordance with the Mortgage Act, Equity Bank Uganda Limited through its auctioneers CL Risk Management Limited advertised the mortgaged properties for sale and informed the general public that the properties would be sold to the highest bidder on October 8, 2021, if Simbamanyo did not deposit the 30% of the outstanding loan amount as ordered by the court.

Simbamanyo then filed Miscellaneous Applications No.719 of 2020 seeking a stay of execution of the orders of the High Court judge in Miscellaneous Application No.678 of 2020 and also filed Miscellaneous Application No. 720 of 2020 seeking for leave to appeal against the ruling of the High Court judge in Miscellaneous Application No.678 of 2020. The two applications were consolidated.

On October 6, 2020, The High Court judge issued his ruling in the consolidated Miscellaneous Application Nos.719 and 720 of 2020 dismissing both applications. “Essentially the judge upheld the ruling of the Registrar that had ordered that Simbamanyo should pay 30% of the outstanding loan amounts within 30 days of the date of his earlier ruling of September 6, 2020 otherwise the mortgaged property would be sold”. And by October 8, 2020, Simbamanyo did not deposit the said 30% as ordered by the court. In the absence of any further orders from court stopping the auction, the mortgaged properties were sold after a public auction, in accordance with provisions of the Mortgage Act and the Mortgage Regulations to the highest bidders. Meera Investments Limited (“Meera”) bought Simbamanyo House for $5 million and LuwaluwaI investment Limited (“Luwaluwa”) bought Afrique Suites for $4.3 million (4,350,000).

“It is important to note that this sale by public auction, as required by the Mortgage Act took place on October 8, 2020, within the six months period after the valuation report was made on July 4, 2020. The properties were also sold at prices above their forced sale value to Meera and Luwaluwa who were then registered on the same properties as the new owners,” report reads before it adds;

“Simbamanyo and Peter Kamya (“Kamya”) not being satisfied with the sale filed a new suit against Equity Bank Uganda Limited, Meera Luwaluwa and the Commissioner Land Registration (“the Commissioner”) under HCCS No.837 of 2020 alleging among other things that the sale was wrongful, the property was undervalued and praying that the transfer be reversed. Simbamanyo and Kamya also filed a Miscellaneous Application seeking for a temporary injunction to reverse the sale of the mortgaged properties pending the hearing of the new suit HCCS No 837 of 2020.”

“On December 17, 2020, High Court issued a ruling dismissing Simbamanyo’s application under Miscellaneous Application No.445 of 2020 which had been seeking to strike out the Written Statement of Defence filed by Equity Bank Uganda Limited and Equity Bank Kenya Limited and ruled that the main suit HCCS nO.198 of 2020 should be heard on its full merit. This original suit, HCCS No. 2020, is still ongoing and is next coming up for hearing in the Commercial Court on September 2021.  On December 20, 2020, High Court issued a ruling refusing to grant Simbamanyo’s request for a temporary injunction under Miscellaneous Application No. of 2020, that the sale, transfer and registration of mortgaged properties into the names of Meera and Luwaluwa be reversed pending the hearing of HCCS No.837 of 2020.”

However, on January 7, 2021, Simbamanyo also filed a notice of appeal against the ruling of the learned Registrar refusing to reverse the sale and transfer of the mortgaged properties. This appeal is yet to be heard by Court of Appeal. On February 17, 2021, Simbamanyo’s suit against Equity Bank Uganda Limited, Meera, Luwaluwa and the Commissioner, HCCS No.837 of 2020, abated because Simbamanyo did not file summons for direction in time which meant that the suit against Equity Bank Uganda Limited, Meera, Luwaluwa and the Commissioner was dismissed and this was confirmed by an order of signed by the registrar of the High Court.

The report further shows that on February 21, 2021, Simbamanyo and Kamya appealed against this abatement to a judge of the High Court and also appealed for a stay of execution pending the hearing of the Appeal but court declined to grant Simbamanyo the stay of execution. “On July 30, 2021, the High Court judge dismissed the appeal that Simbamanyo and Kamya had filed against Abatement with costs and HCCS No.837 of 2020. “The suit against Equity Bank Uganda Limited, Meera, Luwaluwa and the Commissioner therefore, stands abated and dismissed from High Court”.

All the above said, BoU in its report concluded, “The mortgaged properties were sold after a public auction, in accordance with provisions of the Mortgage Act and the Mortgage Regulations to the highest bidders.”

Kamya’s Simbamanyo House was bought by Sudhir’s Meera Investments Company Limited at a whopping $5million approx. (shs18.5 billion) while Afrique Suites were sold to Luwaluwa Investments. Meanwhile, don’t spend a day on Kampala streets looking for Simbamanyo House, it has since been renamed Gender & Labour House.

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