By David Ijjo
President Museveni has told Peter Kamya the owner of Simbamanyo House, now Gender and Labour House Simbamanyo, that the transaction that resulted in his properties being auctioned was legal.
Mr. Museveni in his letter addressed to Kamya on October 25, 2021, stated that Kamya defaulted his loan payment, and can seek court redress at his liberty.
“Following receipt of your complaint to me about the above illegal sale of your properties by Equity Bank, I directed the Attorney General and the Governor, Bank of Uganda to investigate the complaint and report back. I have since been advised that the sale was legal, since you had defaulted on payment of the loan and did not deposit 30% of the loan amount as was ordered by the court” reads in part of the letter.
The President proceedingly noted that “They have further advised that you are at liberty to pursue other remedies in court”
Case Background
In August 2012, Equity Bank Uganda and Equity Bank Kenya issued a monetary loan worth 10 million dollars to Simbamanyo with purpose of financing a hotel construction in Luzira and to as well take over Kamya’s prior loan from Shelter Afrique.
Kamya consitently received money from the rent payments however did not cancel any of his loan obligations.
Equity Bank Uganda commerced with a shut out proceeding against Simbamanyo in order to recover the overwhelming loan.
Simbamanyo House and Afrique Suites Hotel on Mutungo Hill in Kampala were held in sieze last year after Kamya and his Simbamanyo Estates failed to clear loans of 10.8 million dollars dollars ( approximately Shs40 billion).
Bank of Uganda in its report to the President defended the decision made by Equity Bank to auction Simbamanyo House and Afrique Suits asserting that the transaction was done under the law.
Bank of Uganda allerged that Simbamanyo and Kamya failed to respect their loan obligation in failure to refund the loan as agreed by parties yet he continued receiving money from 2016 until September 2020.
“From 2016 to September 2020, Kamya continued to receive from the mortgaged properties without considering paying back the loan but instead chose to ignore the agreement as he opted for legal means even with reminders no payment came through”
In a detailed reported compiled to President Yoweri Museveni on the events surrounding Simbamanyo Estates Limited and Equity Bank Limited for both Uganda and Kenya Branches, indicates that between 2012 and 2014, the estate took an excessive loan of 7.1 million dollars before interest and secured the said facilities by mortgaging LRV 2220 Plot 2 folio Lumumba Avenue (Simbamanyo House) and properties comprised in Kyadondo block 243 Plots 95, 958,2794,17800 and block 237 Plot 95 land at Mutungo (Afrique Suites).
“And by October 8, 2020, Simbamanyo did not deposit the said 30% as ordered by the court. In the absence of any further orders from court stooping the auction, the mortgaged properties were sold after a public auction, in accordance with provisions of the Mortgage Act and the Mortgage Regulations to the highest bidders”
In October 2017, Justice Billy Kainamura passed his ruling in the Miscellaneous Application No. 1159 of 2017 and, in line with the mortgage property Act, gave an order to Simbamanyo to deposit 30% of the overwhelming loan amount if not, Equity Bank Uganda Limited would be at liberty to sale of the properties at a public auction after 30 days.
On July 4, 2020, the report extendedly disclosed in reference with the Mortgage Act of 2009, Equity Bank Uganda Limited retained an independent valuation firm which carried out an independent valuation of the mortgaged properties confirming that the forced sale value for Simbamanyo House was 4.6 million dollars and Afrique Suites was 4 million dollars.
However, last week, the commercial Court ordered Simbamanyo Estates and its proprietor Peter Kamya to pay Shs 1.3 billion in legal costs to Equity Bank Uganda Limited and two business firms known as Meera Investments Limited and Luwaluwa Investments Limited.
In his ruling, the Commercial Court Registrar, Mr Elias Kisawuzi ordered Simbamanyo and Kamya to pay Shs600 million to Equity Bank, Shs 400 million to Meera Investments and Shs300 million to Luwaluwa Investments.
“The general rule remains that unsuccessful party will be ordered to pay the costs to the successful party, but the court may make a different order. In other words, the court may decide that as successful party must not be awarded his or her costs,” the court Registrar said.
Simbamanyo through Kamya had filed an application to stop the sale and transfer of their properties; however, In October 2020 the court dismissed the application with costs.
According to Records, Equity bank sold the properties so as to recover its 10 million dollar loan acquired by Simbamanyo in 2017.
The Simbamanyo House that had been acquired at 5 million dollars (approximately shs18.5 billion) by Meera Investment Limited under the ownership of city tycoon and businessman Sudhir Ruparelia.
The building has since been renamed the Gender and Labour House.
Simbamanyo has been numerously involved in court battles against Equity bank which challenged the legality of the10 million dollar unpaid loan.
