By Spy Uganda
It must be a tearful moment for the former proprietor of Simbamanyo Estates Limited, Peter Kamya after losing a multi-billion property case against three private entities including Sudhir Ruparelia’s Meera Investments Limited.
Others are Luwaluwa Investments Limited, Equity Bank Uganda Limited and the Commissioner Land Registration.
Justice Stephen Mubiru yesterday declined to grant an injunction sought by Kamya restraining the companies from selling, alienating, mortgaging, transferring, encumbering and creating third party interests in the two properties.
On October 8, 2020, Equity Bank sold Afrique Suites Hotel on Mutungo Hill to Luwaluwa at $4,350,000 (Shs15.6bn) and Simbamanyo House on Lumumba Avenue to Meera at $5m (Shs18.5bn) after Kamya failed to pay a Shs38b bank debt.
“Considering the effect of the delays inherent in the administration of justice, a temporary junction will have a disproportionate effect on the companies as an impediment from the pursuit of their proprietary rights,” the head of the Commercial Court noted.
Mubiru further stated that the order if granted would inflict more hardship than it would avoid, on the companies. He said the properties since October 8, 2020, have been transferred and are in possession of Meera and Luwaluwa.
“The implication is that the status quo for the last one-and-a-half years is that the two companies have been exercising the right attendant to being the registered proprietors of properties,” he said.
Mubiru said Kamya seeks an interlocutory injunction to protect himself against injury by violation of his claimed property rights which could be compensated if the final case is ruled in his favour.
Although Kamya pleaded that the caveats he lodged on September 8, 2020, were vacated to allow transfers that followed the sale of properties, the judge said he is barred by section 22 (2) of the Registration of titles Act, to renew the caveats.
The court found that the nature of both properties is purely economic, with no aesthetic or sentimental overtones.
During the hearing, Meera managing director Sudhir Ruparelia said he bought the property at plot 33 legally at an auction conducted by Equity Bank as the mortgagee.
He then subsequently caused a transfer into Meera which is in possession to date and has let out to rent-paying tenants.
“Meera neither purchased nor acquired any business of Kamya conducted on that property, their assets, trade fixtures, tenants or goodwill. The allegations that Meera intends to alienate the property is speculative,” he contended in his affidavit.
Meanwhile, the Commissioner Land Registration, contended that it acted lawfully and within its mandate when it caused the transfer of properties into the names of Meera and Luwaluwa based on valid instruments of transfer.
Summarized Genesis Of This Saga
It all began when 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 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 a $10m Mauritian loan for purposes of refinancing the existing loans for a period of 24 months.
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 the 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) to recover Bank’s unpaid loan amounting to about $8.1million (approx. Shs30billion).