Equity Bank is locked in a property battle with Simbamanyo Estates, with the bank accusing the real estate company of failure to service a $8.1m (Shs29.83b) loan facility.
According to court documents filed in the Commercial Division of the High Court and seen by Daily Monitor, on August 20, 2012, Equity Bank Kenya and Equity Bank Uganda entered into a financial transaction agreement that would lead to release of $6m to Simbamanyo Estates.
The loan sought to finance the construction of Afrique Suites Hotel in Mutungo, Luzira north east of Kampala as well as facilitate a take over a prior loan facility that had been advanced to Simbamanyo Estates by Shelter Afrique.
The two banks, details indicate pooled money together to advance the facility with at least $3.5m drawn from Equity Bank Kenya and $2.5m from Equity Bank Uganda.
The total outstanding including interest and operational fees, among others, court documents show, would come to at least $8.10m (Shs29.83b).
However, Simbamanyo Estates, acting through Muwema and Co Advocates and Solicitors is challenging the amount, saying the company is only aware of $7.19m (Shs26.48b).
Simbamanyo Estates is also challenging how Equity Kenya and Bank One were drafted into the loan agreement yet it had never applied for any facilitate later alone own a bank account in any of the said financial institutions.
Therefore, Simbamanyo Estates, court documents show, is seeking an order declaring that Equity Bank Uganda provided an illegal cover to Equity Bank Kenya and Bank One to engage in transit national financial business through granting several loans with following the law.
However, in a defense filed through AF Mpanga Advocates, Equity Bank indicates that it had been short of money, which was availed by Equity Bank Kenya.
Equity Bank also argues, according to court documents, that Bank One, based in Mauritius, was only drafted into the transaction on the suggestion of Simbamanyo Estates after it sought to obtain bridge financing of up to $10m.
Simbamanyo Estates, which had sought to offset the outstanding sums it held with Equity Bank, according to a letter dated 16 November, 2017, acting through Mr Peter Kamya, the managing director and proprietor of the real estate company, wrote to Mr Samuel Kirubi of Equity Bank Group Kenya seeking to restructure the loan through a $10m Standby Letter of Credit.
The letter indicates that Simbamanyo Estates appointed NISK Capital, which approached a number of financial institutions before settling on Bank One, which had shown interest in providing the $10m bridge financing upon fulfilment of certain conditions.
Therefore, Equity Bank argues that Simbamanyo Estates or its agent was fully aware of all transactions conducted by the two financial institutions and the case it had filed in court in March was a "guise or scheme" to defer the performance of its financial obligation that it has since defaulted on.
Subsequently, last Friday, in a noticed published through CL Risk Management Services, Equity Bank indicated it would sell properties two against which the loan had been advanced.
The properties, among them an upscale office building - Simbamanyo House, which currently houses Gender Ministry - in Kampala, and four plots of land in Mutungo, Luzira, on which Afrique Suites Hotel sits, the notice noted would be auctioned unless Simbamanyo Estates clears all the outstanding sums .
Speaking through his lawyers of Muwema and Co Advocates and Solicitors, Mr Kamya, without going into details, told Daily Monitor at the weekend that Simbamanyo Estates had already sued Equity Bank for breach of trust, unethical and illegal conduct.
"... it seems this is an attempt by Equity Bank not only to upstage the court process but also verges on utter disregard if not outright contempt of the court process," he said.
Equity Bank declined to comment on the matter, citing client confidentiality and noted the matter was before court.
Some of high profile property wangles in the last five years
Habib Kagimu Vs Standard Chartered Bank
On May 30, 2018, Standard Chartered Bank moved in on Habib Kagimu over an unpaid loan in the excess of Shs9.7b.
In documents filed before the Commercial Division of the High Court, it was clear that the business relationship that had soured beyond repair due continued failure by Habib Kagimu to service the loan.
Subsequently, Standard Bank notified the public of its intention to auction Habib Kagimu's properties against which the loan had been advanced.
The loan had been advanced to a consortium of companies, among them Habib Oil, Habib Properties, Habib Brothers and Black Eagle Investments.
A number of upscale properties including a residential house in Kololo, others in Bugolobi and Sir Apollo Kagwa Road, were advertised for auction on the premise that Standard Chartered had failed to recover its money from Habib Kagimu.
However, acting through his lawyers, Habib Kagimu, disputed the figure in court, noting Standard Chartered Bank had inflated the value of the loan from Shs7.5b ($2m) to Shs9.7b.
The case is yet to be disposed of after court granted a stay of execution of the auction.
Karim Hirji Vs step children
This has been a silent case brewing inside the family but has now stretched out into the public.
The property wrangle involves city businessman Karim Hirji and his step children, who claim there has been a collusion to grab the estate of the late Ziba Nanyonga Hirji in Uganda and UK.
In a petition to Speaker of Parliament Rebecca Kadaga, Nanyonga's biological children, popularly known as Charm, accuse Hirji, a senior government official and a city lawyer of colluding to grab properties in UK with the ones in Uganda listed as two houses in Bugolobi, two properties in Kololo, two shopping arcades in Kampala, two properties on Mawanda Road, and others in Nansana and Gayaza.
The three complainants include Linda Birungi, Ronald Birungi, and Anita Birungi
Senana Vs Standard Chartered Bank
On September 24 last year, Senana Investment placed caveats on three of its properties that Standard Chartered Bank had threatened to auction over a Shs34b loan dispute.
The properties, including a building on Buganda Road, another in Mengo and a warehouse in Busega, had been due for auction after Standard Chartered Bank published a notice notifying the public of the impending auction to recover its money.
Senana, which lists Ms Frida Nabirongo, Ms Susan Nanyombi, Ms Margaret Tusubira, Mr Willy Semyaalo, Mr Allan Wanyama, Mr Derick Ssekwe, Mr Joshua Kayanja and Mr Fred Serukenya as directors, had first filed a case against Standard Chartered on October 16, 2016 through Kavuma Kabenge and Company Advocates, seeking to restrain the bank or its agents from selling its properties.
The company by then had challenged the manner under which Standard Chartered had attached its properties, claiming that whereas it had paid the loan between 2015 and 2017, the bank had continued to send notices that contained false and manipulated amounts. The case is still pending in court.
Alexander Okello (Okello House) Vs Standard Chartered Bank
In April last year, Standard Chartered Bank sold Okello House to State House at Shs10.3b.
The sale came on the back of a protracted propery dispute with businessman Alexander Okello, who had lost the property to Standard Chartered due to non-payment of a loan that he had secured using Okello House and advanced to Pioneer Easy Bus, transport company in Kampala Metropolitan Area.
State House bought the building through a supplementary request.
In 2009 Okello had also lost another of his properties - Amamu House - to Barclays Bank, which was later sold to Stellah Properties.
Shumuk Vs Bonney Katatumba (late)
This has been, and perhaps continues to be one of the most dramatic property wrangles to ever have graced Uganda's real estate sector.
There has been one order after aother and many, to date, will find it difficult to understand who between Shumuk and Katatumba will eventually own the properties under dispute.
The dispute is centered on two properties including Blacklines House in Kampala and Hotel Diplomat in Muyenga, Kampala
Just last week, there was a ruling in which a Nakawa-based court ruled in favour of Boney Katatumba (now late). He died in 2017.
It is difficult to tell if this will be the last ruling in a property wrangle that spans more than 10 years.
Shumuk Vs dfcu Bank
To compound Shumuk's troubles, dfcu Bank in March 2018 put seven of the company's properties on sale over failure to re-pay a loan estimated to be in the excess of Shs10b.
The properties included two storied residential units in Buye, Ntinda, three warehouse units in Banda, an office block in Ntinda and an undeveloped piece of land in Ntinda.
Isaac Mpanga, the dfcu legal representative from MMAKS Advocates, told Daily Monitor then that the bank had explored all legal options to recover the money but in vain.
"Shumuk has failed to pay [the debt] despite several reminders and going through all the usual procedures for the last nine months," he said then.
Jomayi Properties Vs Centenary Bank
Jomayi and Centenary Bank had had a long-running property battle. In fact in 2016 the bank had attached several of the company's properties including an office block in Old Kampala, a stone quarry in Bulingombe, Mukono and a piece of land in Nalumunye, Wakiso District. The bank sought to recover Shs1.5b as unpaid balance for a Shs2.4b loan.
The company, owned by Joseph Magandaazi Yiga, had for a long time been one of Uganda's real estate business but has since run into trouble over unpaid loans.
In March, NC Bank, which has since merged with Commercial Bank of Africa to become NCBA Bank, acting through AF Mpanga Advocates, published a notice in which it petitioned court to wind up Jomayi Property Consultants over failure to repay a loan of Shs868m.
Yunus Matovu | Drake Lubega Vs Charles Muhangi (late)
It is yet another or one of the most complicated cases to ever have graced Uganda's courts. Actually, it is a case that has had a lot of maneuvers with strings pulled within an outside court.
Until Muhangi's death, the case had had several ruling for and aginst the warring parties.
It is a fight to determine the rightful ownership of a 0.518 acre piece of land in Central Kampala valued at more than Shs112b. The land houses Qualicel Bus Terminal, Qualicel building and Nabukera Plaza.
Sudhir Ruparelia Vs BoU (Carried into 2018)
The matter is still in court following Bank of Uganda's decision to appeal the case in which the Central Bank had take over possession of some building that formerly housed Crane Bank.
Ruparelia Sudhir challeged the takeover, noting the builidings were not part of Crane Bank.
The building, spread in different parts of Uganda had been transferred to dfcu Bank following the bank's acquisition of some Crane Bank assets and liabilities.
Bank of Uganda had taken over the buildings as part of the liquidation process of the now defunct Crane Bank.
However, court recently declared the takeover as illegal. The Central Bank has since appealed the decision.
Compiled by Dorothy Nakaweesi