Kampala – Simbamanyo Estates Limited has lost another prime property comprising a four-star hotel on Mutungo Hill, Nakawa Division, Kampala over failure to pay an Equity Bank loan worth $10.8 million (about UGX40 billion).
Hardly a week after losing Simbamanyo building, which houses the Gender ministry in Kampala, the bank has now auctioned Afrique Suites Limited sitting on three plots.
The hotel was one of the properties which Simbamanyo Estates staked to Equity Bank Limited as collateral while securing the $10.8 million loan in 2017.
It emerged yesterday that Luwaluwa Investments Limited, a real estate firm has taken possession of the property after purchasing it from the bank.
Documents show that Luwaluwa Investments bought the property at $4,350,000 (more than Shs 16 billion) from the bank on the same day, Meera Investments Limited owned by tycoon Sudhir Ruparelia bought Simbamanyo building which is housing the Gender Ministry among other entities on Lumumba Avenue.
The two properties, Simbamanyo building and Afrique Suites in Mutungo Hill were sold by Public auction by the Equity Bank on October 8 this year after court dismissed pleadings in which the proprietors of Simbamanyo Estates Limited had sought to stop the sale.
When contacted, the directors of Luwaluwa Investments Limited Ms Clare Luwangula confirmed the transaction but could not divulge on the matter.
“We do not transact our business in the media,” said Ms Luwangula before hanging up.
On Friday, Simbamanyo Estates through its lawyers withdrew an application in which it had sought to temporarily stop the sale and takeover of its properties pending their appeal.
Simbamanyo Estates had petitioned the Court of Appeal seeking orders to maintain the status quo stopping the sale of their property by Equity Bank which is seeking to recover loans worth $10.8 million (more than Shs40 billion).
They were seeking to halt a High Court order that required them to pay 30 percent of the outstanding loan amount worth Shs12 billion.
When the matter came up for hearing before Justice Christopher Madrama, Simbamanyo Estates lawyer Robert Friday Kagoro told the court to allow withdrawal of the case reasoning that it had been overtaken by events.
Equity Bank lawyers; Sim Katende and Frederick Mpanga asked the court to order Simbamanyo Estates to pay them legal costs incurred by the bank.
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How it started
The properties were guaranteed to Equity Bank Uganda as security to get the loan in November 2017.
Simbamanyo Estate Limited through their lawyers of Muwema and Advocates had sought to halt the intended sale.
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.
The Estate sued Equity Bank Uganda and its counterpart in Kenya challenging the legality of the outstanding loan. The case is pending hearing and determination before the Commercial Division of the High Court.
But Equity Bank Limited argued that 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.