The Kampala High Court has dismissed the application in which Simbamanyo Estates Limited wanted to block the transfer of Simbamanyo house to Equity Bank. The property was meant to recover an outstanding loan of Shs 40 billion.
In February 17, 2021, the Commercial Court issued an order okaying the take over of the building which was later sold to Meera Investments through public auction. the order followed Simbamanyo Estates’ decision to withdraw application in which challenged the take over of the Estate.
In her ruling earlier today, justice Susan Abinyo said Simbamanyo Estates failed to present solid evidence regarding the matter. She ordered Simbamanyo Estates to meet all costs that Equity Bank, Meera Investments, Commissioner Land Registration and Luwaluwa Investments incurred.
” Costs of this appeal are awarded to respondents, She ruled. Court also dismissed all grounds that Simbamanyo Estates presented to regain its Estate which was sold by Public Auction.
” Stopping the sale of Simbamanyo Estates would have infringed on the bank’s right to be heard and inconvenience the team which organised and advertised on September, 8, 2020 confirming that the property would be auctioned on October 8, 2020.” She ruled.
Simbamanyo Estates Limited lost property, Afrique Suites Hotel and Simbamanyo House over a $10.8 million loan acquired from Equity Bank.
Last year, the Estate lost Simbamanyo House located on plot 2 Lumumba Avenue after it failed to service the loan. The building had been mortgaged by its owners with Equity Bank but after failing to pay, the exercise was conducted through public bidding on October 8 by Equity Bank Limited.
According to documents seen by EagleOnline, the hotel was sold the same day as Simbamanyo House was sold.
According to court documents filed in the Commercial Division of the High Court, on August 20, 2012, Equity Bank Kenya and Equity Bank Uganda entered into a loan agreement in which the two banks agreed to advance Simbamanyo with $6m.
The loans, which would make up a consolidated sum of $8.10m (Shs29.83b) including interest and operational fees, among others, sought to finance the construction of Afrique Suites Hotel in Mutungo, Luzira northeast of Kampala and facilitate the takeover of a prior facility advanced to Simbamanyo by Shelter Afrique.
History of the loans
The two banks, details indicate, pooled money together with at least $3.5m drawn from Equity Bank Kenya and $2.5m from Equity Bank Uganda. However, Simbamanyo Estates challenged the outstanding sum, saying it is only aware of $7.19m (Shs26.48b).
In its defence, Equity indicates that Sambamanyo benefited and was aware of every financial transaction that was advanced to it. Equity also argued that Bank One, based in Mauritius, was drafted into the transaction on the request of Simbamanyo, which had sought to obtain bridge financing of up to $10m.
In the same spirit, Simbamanyo Estates Limited withdrew their application in which they were seeking to stop the takeover of its property on Lumumba Avenue. They 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 (Shs40 billion).
Court documents indicate that upon issuance of the High Court order on September 7 last year, the bank advertised their property, and was meant to and finally sold on October 8.
