5 January 2012

Uganda: Govt Wants Basajja to Return Sh24 Billion

Bank of Uganda (BoU) has asked the finance ministry to appoint a debt collector to recover sh24b that the government used as a bad loans bail-out for businessman Hassan Basajjabalaba in 2004.

BOU's director for communications, Dr. Jan Tibamwenda said that the central bank wrote to the finance ministry to appoint a debt collection agent so that it can hand over the debt for collection. He said the ministry is yet to respond.

According to Tibamwenda, the communication to the ministry followed the cancellation of over 12 forged land titles that Basajjabalaba made to circumvent the ones held as security by BoU. This was meant to sell off the properties using the forged titles without the central bank's knowledge which holds the genuine ones.

The deputy secretary to the treasury in the Ministry of Finance, Keith Muhakanizi, was non-committal but said he needed to consult the people handling the issue.

The titles had been deposited with the central bank after the government saved Basajjabalaba's assets when he failed to pay Standard Chartered and Stanbic bank loans. The Standard Chartered Bank loan amounted to $14m while the Stanbic bank loan was $8m.

The understanding was that BoU would deposit the money with the two banks which it would recover once another commercial bank bought out Basajjabalaba's debt.

The businessman was to find another commercial bank willing to buy the debts from the banks that were demanding the money from him and that then he would start paying the new bank.

However, after the bail-out, Basajjabala irregularly procured fresh titles to properties whose genuine titles had earlier been mortgaged to BoU as security for a multi-million dollar loan.

Using the new titles, Basajjabalaba quickly sold off the properties to his cronies in an attempt to conceal their ownership, according to court documents.

On realising this, the central bank went to the courts to quash the consent decree upon which the new titles were issued and re-establish its right over the properties mortgaged to it.

The central bank argued that Basajjabalaba used a fake court order dated June 25, 2008 to acquire new titles to the properties and selling them rapidly, leaving BoU holding on to the genuine titles.

He is said to have entered multiple transfers on each of them within a fortnight, which the central bank insisted that it was meant to put the properties out of its reach.

Evidence in the court then showed that the properties were transferred to six of his friends, who transferred the properties to themselves with the help of a lawyer.

Court documents named the six associates as Saidi Kayondo, Dan Katarihwa Kwatampora, Stephen Kagoro, Silagi Tumwine, Imam Kankurihemu and James Magezi.

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