Stanbic Bank

The Commercial Division of High Court has ordered Stanbic Bank (U) Ltd, to pay Shs400 millon after its top employees created conduit company dubbed Myriad Investment Club limited and hence grabbing mortgaged properties and sold them among themselves.

The shareholders of Myriad Investment Club limited include; Kenneth Kitungulu (Executive and head Global markets Stanbic Bank), Lawrence Kaweesa (Global Business Manager Stanbic Bank), Allan Muhinda (interests dealer Stanbic Bank), Daisy Nitwe (Treasury sales dealer Stanbic Bank).

The others are; Emmanuel Rukeeba (head analytics and products Stanbic Bank), Maureen Kembabzi Katwebaze (works with Stanbic IBTC Bank Nigeria) and Thaib Lubega (Formerly Treasury Manager Stanbic Bank).

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In 2017, Macdowel limited mortgaged its properties on plot 1, 3, 4, 5 and 6 closes, Luzira to Stanbic Bank Limited as security for a loan. The company at times failed to pay loan instalments on time and decided to go for Consent judgement to clear the loan by 30th June 2020. The company claimed that they paid off the loan but the bank has declined to release its titles.

It was revealed that Kenneth Kitungulu and Daisy Nitwe signed the sale agreement as the buyer’s directors. The sale agreement was drawn by the bank’s legal department, colleagues of the buyers/ directors/ shareholders.

The agreement bears a stamp of head BPP Credit, Stanbic and signature of Denis Lugoloobi, a senior manager Credit evaluation signing for the bank.

According to section 39 (2) and (3) of the mortgage Act, sale of mortgage property by a bank to its employees, is a crime punishable for not less than 24 months in prison.

Upon that the company ran to the High Court challenging the matter in which its properties were grabbed by Bank employees and sold among themselves. It also petitioned the Police CID to investigate the matter. The company claims that its properties were undervalued in that they were sold at Shs 1billion yet the actual value of the property is Shs 4billion.

And today, Justice Richard Wejuli Wabwire penalized the Bank and ordered it to pay over Shs 400millon to Macdowel limited.

“I could not turn a blind eye when employees of Stanbic Bank circumvented the law to the disadvantage of their esteemed customers,” he said in his ruling.

“It is very clear from the evidence on record contained in the affidavits in support of this application and rejoinder that the shareholders of the 2nd respondent (Myriad Investment Club)…..are employees of the 1st respondent (Stanbic Bank) on February 3, 2020, opportunistically incorporated a sham or conduit company in the name of 2nd respondent (Myriad), with a hidden motive of purchasing the securities, of the applicant (Macdowel),” he ruled.