KAMPALA – The owners of Simbamanyo Building on Lumumba Avenue in Kampala have three days to pay at least $3.15million (UGX. 11,651,706,560) to the bank lest their property will be auctioned.
The said money amounts to 30 percent of $10.5 million ((UGX. 36bn) loan which was advanced to Simbamanyo Estate Limited in November 2017 by Equity Bank Kenya with the guarantee given by Equity Bank Uganda.
The building which hosts the gender ministry and three plots at Mutungo in Nakawa Division are due for sale on September 7 and 11 this year respectively.
The sale by public auction comes after the banks accused the company, Simbamanyo Estates Limited of defaulting on their loan repayment contract for four years.
It is alleged that the proprietors of Simbamanyo Estates Limited acquired the loan by way of a mortgage from Equity Bank Kenya and guaranteed by Equity Bank Uganda.
According to the documents, Simbamanyo Estates forfeited the building on Plot 2 Lumumba Avenue and three plots of land at Mutungo in Nakawa Division.
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 seeks to enforce the disputed credit facility advanced on November 30 2017.
Through its lawyers, Equity Bank states the proprietors of Simbamanyo Estates Limited defaulted on their loan obligations when they failed to pay any money as required by the contracted signed.
According to the court documents, on June 4 the bank issued a notice of default to the company demanding payment of arrears of $398,362.33.
The advert shows that the building is housing the Ministry of gender and a land in Mutungo in Nakawa Division under Simbamanyo Estates Limited are due for sale on September 7 and 11 this year respectively.
But upon pleas by Simbamanyo Estates, the Commercial Court has issued an interim order stopping the sale.
Court registrar, Susan Kanyange halted the sale of the multibillion properties until the judge determines the issues between Simbamanyo Estate Limited and the two banks.
Registrar Kanyange directed that the sale of the properties can only be stopped after the company has paid 30 percent of the outstanding loan amount to the bank.
“I order that the applicant (Simbamanyo Estate Limited) deposits 30% of the outstanding amount that is $10,514,500. So 30% of that. I am not persuaded with due respect to counsel for the applicant,” Kanyange ruled.
The order to pay 30 percent of the outstanding loan followed an argument in which Equity Bank through its lawyers argued that if any sale is to be stopped, the proprietors of Simbamanyo Estates Limited had to pay 30 percent to the bank.
Simbamanyo Estate Limited through its lawyers of Muwema and Advocates have since sued Equity Bank Uganda and Equity Bank Kenya challenging the loan advanced to it citing illegalities for which the banks cannot benefit.