KAMPALA — Tirupati Development Uganda Limited, has taken to High Court, KCB Bank Kenya Limited and its Ugandan subsidiary KCB Bank Uganda Limited over a nascent syndicated 24.6billion about $7 million loan in which the lender is accused of gross contract breaches, money laundering, fraud and conspiracy to defraud.
Court documents seen by this website indicate that KCB subsidiaries jointly accepted to advance cross-border loan to Tirupati Development Uganda Limited worth UGX. 24.6.
Tripaati Development Uganda Limited who held one account with KCB Uganda— provided a series of certificate of titles to two banks as collateral for this facility—both parties agreeing that UGX18.09billion ($5.14million) be disbursed to Tirupati’s account between July 2021 and August 2013,
UGX 5.6bn between September 2013 and August 2014 whereas a final disbursement of UGX 972milion was to be effected in September 2014.
Despite written agreements, KCB only disbursed $6.99million and in the process cheating from him a whooping $700,000, in what he describes as a blatant breach of contract and fraud by KCB ‘brothers’.
“They failed to disburse the total agreed amount of USD 7,000,000. They debited the plaintiff’s (Tripaati) account with loan negotiation fees above the agreed amount. They failed and willfully refused to provide the plaintiff(Tirupati) with a breakdown of how the loan negotiation amount charged was arrived at,” the court documents say.
Tripaati claims that KCB Uganda Limited Uganda and KCB Kenya Limited breached the different loan agreements terms entered into with him and in the process, illegally opening and operating two separate dollar loan accounts in the names of Tirupati Development Uganda Limited without the company’s knowledge and consent in August 2016 and two other new accounts in January 2017.
Documents show that when the client —Tripaati Development Uganda Limited complained about the several suspicious transaction on its current and loan accounts, the two banks failed to provide an explanation for the “suspicious” transactions.
“The plaintiffs(Tirupati) also made demands for a reconciliation of accounts, clarity on the status of their loan repayments, and requests for the issuance of bank statements. None of these requests were honored. This inevitably led to the Plaintiffs’ failure to meet her loan obligations. The Plaintiffs will aver and contend that the 2nd and 3rd defendants breached their fiduciary duty towards the plaintiff,” the court documents further indicate.
“They acted for private gain by operating unexplained suspicious transactions on the Plaintiff’s current and loan accounts. The Plaintiff will aver and contend, as is pleaded further below, that these activities were illegal. Further, that these transactions also constituted a conflict of interest between the interests of the plaintiff and those of the 2nd and 3rd defendant.”
“They did not act in the Plaintiff’s best interests when they failed to offer a clear explanation of the suspicious transactions which amounted to a breach of fiduciary duty, and routinely failed to provide key information when requested, or provided contradicting information in several instances.”
Tripaati says forensic scrutiny into the the books of account revealed massive unexplainable transactions in which the two frequently charged the operations account for Tirupati as loan repayment but reflected less figures as having been paid towards the loan.
“The auditors also observed that several unknown un-authorized top up loans had been given by the 2nd defendant and purportedly used to pay off loans to the 2nd defendant on the same date. Further that these as well as other numerous irregularities had the resultant effect of increasing the loan balances due, which coupled with the Defendants’ refusal to provide the Plaintiff timely statements and explanations for suspicious transactions, made loan/debt scheduling an impossibility,” the court documents read.
Sued alongside the lenders are Bank of Uganda and Financial Intelligence Authority —with Tripaati demanding regulatory sanctions against KCB Uganda and KCB Kenya over fraud.
“The plaintiff seeks a declaration that the 2nd and 3rd (Finance Intelligence Authority defendants failed to properly manage the risk of financial crime exposure to the plaintiff when they wantonly occasioned the impugned transactions on the Plaintiff’s accounts and in the plaintiff’s name,” court documents say.
Tirupati has since asked court to declare that BoU failed in its regulatory duty when it failed to detect KCB’s misfeasance in not reporting accurately the status of Tirupati’s loan account status.
Tirupati also wants court to declare that KCB misappropriated their funds to a tune of UGX 35billion ($995,466) and that the same should be returned to Tirupati in special damages.
Tirupati also wants court to order that the business is entitled to the return of 20 certificates of title unlawfully held by Bank of Uganda.