You Have No Right To Appeal: AYA Investment Ordered To Cough Ugx611B Debt

You Have No Right To Appeal: AYA Investment Ordered To Cough Ugx611B Debt

By Spy Uganda

The court of appeal has ordered AYA Investment Uganda to pay the Industrial Development Corporation (IDC) S.Africa Ltd after ruling that AYA cannot appeal in the matter where the commercial court endorsed the payment of Ugx611billion award to the South African company.

It’s worth noting that in 2021, the Industrial Development Corporation of South Africa Ltd attempted to seize the hotel to recover a debt of $118 million but the court barred it.

The money is part of the financing contract signed between AYA and the South African entity to finance the construction of the hotel in 2007. AYA says the corporation made it hard for them because it would delay the availability of the money, which delayed the project completion.

AYA also cited disputes with Uganda Revenue Authority (URA) on what taxes to pay but also admitted that it was going to be tough completing the construction in time, especially due to Uganda’s landlocked nature.

Other Debts

In 2017, AYA signed a management deal with a Belgium-based hotel company, Carlson Rezidor Hotel Group (now Radisson Hospitality) in January 2017. However, this was short-lived as Radisson withdrew six months later. It was replaced in September of the same year by a South African hotel brand, Sovereign Hotels on a short-term basis to oversee the opening the following month.

American group, Wyndham Hotels, and Resorts, then was hired by AYA boss Muhammed Hamid, in 2018 to run the hotel, but this was also short-lived. It is currently trading as WIN 5 Hotel & Spa since February this year. The branding has since changed from Pearl of Africa to Win 5, amidst reports that the Libyan foreign investment firm, LAICO has taken the majority holding of the hotel.

It is not clear how many companies and individuals have claims on AYA, but one of the longest-running claims is by meat processing company, Fresh Cuts, which says that in 2017 AYA was supplied with assorted meat products worth Shs 44.9 million which it failed to pay for.

Through Haguma Law Chambers and Advocates, Fresh Cuts secured commitments by AYA to pay but it didn’t fulfil the pledge. On September 12, 2018, Mengo chief magistrate Sarah Mbonye directed AYA Investments to clear the Shs 44.9 million debt plus a 25 per cent per annum interest from the year of default to the year of completion of payment, with allowable tax deductions of Shs 10 million.

After failing to enforce this directive against the hotel owner, Fresh Cuts asked the court in 2021 to declare AYA Investments bankrupt following the expiry of the time agreed to clear the date as per the Insolvency Act. In 2018, KCCA threatened to close the hotel over failure to pay local hotel tax that had accumulated to almost Shs 34 million. The hotel was requesting concessions like paying in instalments which KCCA rejected.

At the same time, the electricity bill was rising and by 2021, the distribution company, UMEME was demanding over Shs 800 million and resorted to power disconnections to force the company to pay.

Last year, Sanlam General Insurance sued AYA Investments for breach of insurance contracts. Court ordered the company to pay a total of about Shs 175 million to Sanlam. an accessible web community

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *