By Spy Uganda
Kampala: The High Court (Commercial Department) has trashed Simbamanyo Estates’ case for failure to take out summons for directions in time.
Simbamanyo House, located on Lumumba Avenue was purchased by Meera Investments Ltd of tycoon Sudhir Ruparelia for a fee of Shs3Shs18.5bn in October 2020, after it was put up for sale by auction by Equity Bank to recover loans advanced to the owners.
Representing the second defendant Meera Investments who now own Simbamanyo House, Walusimbi & Co. Advocates wrote to the Deputy Registrar of the High Court praying that the suit abates since the plaintiffs did not take out summons for direction in the stipulated time.
“The last written statement of defence was filed in November 2020. The pleadings have been closed in accordance with Order 8 Rule 18(5) of the Civil Procedure Rules S.1 No.71-1. In accordance with Order XIA Rule 1(6) of the Civil Procedure Rules S.1 No. 71-1, as amended, this suit has abated since the plaintiff did not take out summons for directions within the statutory time,” Walusimbi & Co. Advocates wrote.
In her ruling on February 17, Her Worship Lillian Bucyana ordered that the suit abates for failure to take out summons for directions on time.
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 estate said, 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).