Details have emerged of the property row between city tycoon Peter Kamya and Equity Bank with the latter accusing the former of failure to service a Shs29.83b loan.
On Friday August 7, 2020, there were reports that Equity Bank through its agents advertised the sale of Simbamanyo House.
However, when contacted the Managing Director of Simbamanyo Arc, Peter Kamya stated that it is Simbamanyo that sued Equity Bank and another for breach of trust, unethical and illegal conduct as well as its predatory practices.
However, for Equity Bank to go ahead and advertise the sale of Simbamanyo Properties shocked many and those at Simbamanyo because the case is still ongoing in court.
Simbamanyo through their lawyers M/s Muwema & Co. Advocates and Solicitors, Plot 50 Windsor Crescent Road, Kololo, P.O. Box 6074 Kampala, sued Equity Bank and another for breach of trust, unethical and illegal conduct as well as its predatory practices.
DETAILS
According to documents seen by this publication, on the 20th day of August 2012, Equity bank and another granted a loan facility of US$ 6.0m to Simbamanyo to finance construction of a Hotel on land comprised of Kyadondo Block 237 Plot 95 land at Mutungo and Luzira and also to take over a prior facility from Shelter Afrique.
Simbamanyo started servicing the above loan but ran into difficulties with the loan due to the banks alleged unlawful debiting of the loan account with fabricated and unexplained amounts and uncertain interest charges leading to the accumulation of colossal arrears.
When Simbamanyo started questioning this unfortunate state of affairs Equity Bank introduced a sweetener which seemed a good idea. That Arc Peter Kamya could sell the land he owned at Munyonyo and use the proceeds to clear the accumulated arrears and also part of the loan.
The Bank subsequently brokered a deal with some Eritrean investors, the Bahamas group to buy the land for shs5.5 billion
“Equity bank supposedly offered Bahamas a loan to buy the land and were requested to put down a deposit equivalent to 40% shs1.3 billion. Arc Kamya never saw the loan offer nor the loan agreement but that was not his place. Nevertheless, the Bahamas group paid the bank to clear the accumulated arrears. Unfortunately, EQUITY bank negated on the loan. They refused and/or neglected to write a letter of comfort, as is the normal practice, to Arc Peter Kamya confirming that indeed they would pay him the difference on submission of the titles. It seems the Eritreans knew the bank had negated on the loan offer because they never pushed the bank to write such a letter and when contacted by Arc Kamya they promised to find the money from their internal resources and not bother with the bank anymore,” reads part of the documents filed by his lawyers.
Arc Peter Kamya waited a whole three years and the money never came. He even offered to sell them part of the land but the Eritreans failed to come up with the money. Instead they lodged a caveat on the land requesting for refund of the deposit they had made.
Arc Kamya pleaded with them to lift the caveat so he could sell part of the land and refund their money but they refused. Wherefore Arc Kamya terminated the contract after a whole three years of haggling with the intransigent Eritreans. They resorted to the courts wherefore Arc Peter Kamya let the law take its course.
Meanwhile, “Equity bank continued the predatory activities Simbamanyo, was therefore forced to take Equity Bank to court and file HCCS no 544/2016 against Equity Bank challenging the unlawful debiting of their loan account with fabricated and unexplained amounts and uncertain interest charges that led to the accumulation of such colossal arrears. Simbamanyo sought and obtained an injunction restraining Equity Bank from selling the securities.”
When the High Court granted the injunction on condition that Simbamanyo deposits 30% of the debt. Simbamanyo filed a constitutional petition no. 42/2017 against EBU and the attorney general, challenging the constitutionality of this condition. The case for Simbamanyo was that by demanding pre-payment of 30% of the disputed debt the plaintiff’s constitutional presumption of innocence was being eroded.
In an effort to stop the escalation of the above court case, Equity Bank and EBK brokered a new deal with a foreign bank to lend US$ 10m to the plaintiff to pay off the old loan with the Equity Bank lenders.
The decision to borrow an amount far in excess of the us$ 7.195,877 outstanding debt was dictated and influenced by the Equity Bank lenders with tacit approval of the foreign bank.
The bank compelled Simbamanyo to take the above loan by means of undue influence because at the time of the refinancing deal, the 1st Defendant had taken foreclosure measures on the mortgage and was actively threatening to liquidate and sell the Plaintiffs securities by public auction.
In fear of the above adverse actions of the bank, Simbamanyo yielded and accepted the foreign bank’s loan offer which was made on the 16th November, 2017 for a bridge loan of US$ 10m for purposes of refinancing the existing loans.
The documents add that, “The 1st and 2nd Defendants falsely and dishonestly represented, that they had granted a loan to the Plaintiff whereas not and induced the Plaintiff to sign a fictitious loan facility with the intention to disguise, diminish, obscure or conceal a material fact of the 3rd Defendant’s illegal loan.”
Simbamanyo also says that all the Defendants contrived to participate in the illegal and unlawful trans-national financial transactions in breach of International banking best practices and International commercial diplomacy between Uganda, Kenya and Mauritius.
