Tropical Bank Uganda Limited and its client, IT Office [U] Limited, find themselves at the center of a scandal after failing to repay a loan of over Shs6.84 billion to Prime Finance Company Limited. The debt has since risen to over Shs21 billion, shaming the local banking sector and causing panic within both institutions.

Prime Finance Company Limited is owned by city tycoon Sudhir Ruparelia

On March 13, 2020, Prime Finance Company Limited extended a Shs5.7 billion loan to IT Office [U] Limited, with Tropical Bank Uganda providing a written guarantee to repay the loan if IT Office [U] Limited defaulted. The loan, which came with a hefty 5% monthly interest, was to be fully repaid by July 9, 2020. However, four years have passed, and not a single payment has been made, leading to the significant accumulation of the debt.

In February 2020, IT Office [U] Limited requested the loan from Prime Finance Company Limited to settle outstanding debts it owed to Tropical Bank. In exchange, Tropical Bank agreed to an irrevocable undertaking, binding both itself and IT Office [U] to repay the loan and any accrued interest. The funds from the Prime Finance loan were intended to help IT Office [U] Limited pay off its Shs5.7 billion debt to Tropical Bank and secure an even larger loan of Shs10 billion.

Despite these assurances, Tropical Bank now refuses to honor its commitment. The bank’s board claims that the transaction was fraudulent; an allegation dismissed by the bank’s senior staff, including the Executive Director, Head of Credit, and Legal Manager. These officials assert that they followed all internal procedures, signing the undertaking to benefit the bank, not themselves personally.

The bank’s staff claims that after signing the irrevocable undertaking on behalf of the bank they sealed the same irrevocable undertaking with the official bank seal, meaning all was okay, and therefore the bank had to pay over Shs6.840 loan to Prime Finance Company Limited.

Under the irrevocable undertaking, Tropical Bank Uganda as the undertaker guaranteed that the debt was recoverable against them with 5 percent interest per month until full repayment, regardless if their client IT Office [U] Limited was able or unable to repay the debt.

IT Office [U] Limited’s loan of Shs5.7 billion from Prime Finance Company Ltd helped the bank to recapitalise as demanded of it by the Bank of Uganda [BoU], the regulator of the banking industry in the country. This money from Prime Finance Company Limited would enable IT Office [U] Limited to secure another Shs10 billion from Tropical Bank Uganda since the bank still held the company’s collateral including various pieces of land, and a motor vehicle worth billions of shillings.

Indeed, staff of the bank confirm that IT Office [U] Limited started overdrawing its account after paying the Shs5.7 billion debt to Tropical Bank Uganda, making the bank a beneficiary of Prime Finance Company Limited’s money.

However, despite several reminders that Tropical Bank Uganda pays the debt to Prime Finance Company Limited, the former has not been cooperative. The bank in a bizarre move shifted goal posts, running to BoU, claiming that the Shs5.7 billion loan transaction was a result of fraud, but the response from Prime Finance Company made Bank of Uganda advise Prime Finance Company that it seeks remedies available to it under the Contract Act 2010, BoU having recognised that there was an irrevocable undertaking on the side of Tropical Bank Uganda to repay the loan and interest at the time of signing the agreement.

Following BoU advice, Prime Finance Company Limited, through its lawyer, would on December 4, 2022, file a suit against IT Office [U] and Tropical Bank Uganda, and on August 30, 2021, court ruled in favour of Prime Finance Company Limited for recovery of Shs6.84 billion, repayable at interest rate of 5 percent per month on the decretal sum till payment in full and costs in the main suit and application be borne by the respondents. But since the ruling, no repayment has been made by Tropical Bank Uganda.

In a meeting at Tropical Bank Uganda when the Shs5.7 billion was being sought, its officials assured Prime Finance Company Limited that the bank would personally repay the money guaranteed by July 9, 2022, yet the bank officials also agreed to pay interest on principal sums in case the bank failed to pay the money on an agreed date.

From the documents in possession of this website, it appears Tropical Bank Uganda Board of Directors want to use the excuse of not authorising their senior staff to transact loan business to defraud Prime Finance Company Limited, especially under the influence of the current Executive Director, formally heading the Recovery Department of the bank at the time of this transaction.

At the time top managers threatened to tear each other into pieces to rise to the top. It’s such internal strife and the bank’s financial struggles that became unbearable for Former ED, Head of Credit department, and of operations, prompting them to hand in their resignation letters.

The infighting, knowledgeable sources say sharply divided management into two rival gangs, with Managing Director Abdul Aziz Mansul, Head of Compliance Caroline B Ogwang and then Head of Recovery Joweria Mukalazi teaming up to throw out ED and his allies in the bank owned by Libyan government through the Libyan foreign bank. Ogwang and Joweria were cited as those who ruthlessly fought off the former Executive Director so that they could take up his position. Indeed Joweria Mukalazi was elevated to the position of bank’s Executive Director in acting capacity.

It’s against this background that most of the bank’s sensitive transactions that were carried out under Former ED’s stewardship were allegedly queried as result of his rivals’ biased actions, something that affected both clients and general bank operations.

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Government lost Shs10.6328 billion in revenue from gold export levies in the financial year ending June 2023, the Committee on Commissions Statutory Authorities and State Enterprises (COSASE) report indicates.

Last year, URA recorded exports of various mineral products and ore. These included other Portland cement, whether in the form of clinkers, other hydraulic cement, Quicklime, salt and pure sodium chloride, raw salt, plasters of calcined gypsum, limestone flux, limestone and other calcareous stone used in the manufacture of lime, cement clinkers, Portland white cement, other clays, sandstone, natural barium sulphate, slaked lime, pebbles, gravel, broken or crushed stone, and others.

Extracts of other minerals exported except gold during the period under review established that 6,469 instances worth a total of Shs72.49 billion, whereby 22 mineral categories were exported without any assessment and payment of the resultant taxes on exportation.

The committee stated that the tax body noted that despite several requests and correspondence with the Ministry of Energy and Mineral Development aimed at ensuring that the enabling law is passed to facilitate the collection of export levy on processed gold and other minerals, there has been no enabling law to date.

“Information provided to the Committee indicates that lack of assessment and payment of the resultant taxes on exportation hindered tax collection, leading to a loss of over Shs10.632 billion in revenue from gold export levies alone,” the committee stated in the report.

MPs observed that whereas it was within the ambits of the Minister to issue statutory instruments or regulations as a remedial intervention measure to facilitate revenue collection on mineral exports, she failed to do so, resulting in a colossal loss of a combined Shs72 billion during the period under review.

“Inability by URA to assess and subject the exporters of the affected minerals to tax was caused by the absence of legislation, thereby exposing the government to the loss of revenues that could have been realised on mineral exportation,” MPs said in the report.

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ITHUBA Uganda, the official operator of the Uganda National Lottery, is proud to announce its outstanding achievement of winning three prestigious awards at the African Marketing Confederation Awards 2024. The company’s innovative “Billionz Zizino” thematic campaign was recognized for its creativity and effectiveness, reinforcing ITHUBA Uganda’s commitment to engaging with its audience.

Held over the weekend in Mombasa, the awards ceremony celebrated the top marketing teams and brands from across Africa. ITHUBA Uganda’s PowerBall Billionz Zizino campaign secured the following accolades:

• SILVER – Best Social Media Campaign of the Year: Acknowledging the campaign’s impact and engagement on social media platforms, this award cements ITHUBA Uganda’s digital marketing prowess.
• BRONZE – Campaign of the Year: This coveted award recognizes the most exceptional marketing effort of the year, showcasing ITHUBA’s innovative approach to lottery marketing.
• BRONZE – Best Use of Local Insights: This award highlights the campaign’s success in leveraging local culture and consumer behavior, creating meaningful connections with audiences.

Michelle Van Trotsenburg, Head of Marketing and Corporate Affairs at ITHUBA Uganda, expressed her excitement: “We are honored to receive these recognitions, which reflect our dedication to creativity and setting up a seamless National Lottery. Through dynamic visuals, strategic partnerships with local influencers, and engaging activations, we’ve created a campaign that speaks to Ugandans. The results speak for themselves, with over UGX 2.5 billion paid out to winners across all divisions and an increase in retailer acquisition from 350 to over 820 agents. This campaign has truly transformed the landscape of our lottery operation considering we have just been in operation for four months.”

The “Billionz Zizino” campaign captivated audiences with dynamic visuals and a robust go-to-market strategy. Key components included strategically placed billboards, partnerships with local influencers, engaging below-the-line (BTL) activations, catchy jingles, and compelling winners’ stories that fostered trust and excitement. This versatile campaign also adapts seamlessly across different lottery games, such as “Millionz Zizino” for SPORTSTAKE 10 and DAILY LOTTO.

The African Marketing Confederation Awards celebrate excellence in marketing across the continent, and this year, brands from Kenya and Uganda stood out among the finalists. ITHUBA Uganda’s achievements are a testament to the hard work and dedication of its marketing team.

For more information about the Uganda National Lottery, upcoming draws, and how to play, please visit www.nationallottery.go.ug or follow us on our social media channels. For inquiries, please contact the toll-free Player Helpline at 0800 334433.

Winnings are tax-free. Players must be 18 years or older. Play responsibly.

About ITHUBA UGANDA

ITHUBA Uganda is the newly appointed official operator of Uganda’s first National Lottery, authorised and regulated by the National Lotteries and Gaming Regulatory Board (NLGRB). With a licence that spans a decade, our mission is to operate and transform the National Lottery into prosperity for Ugandans.

Finance Minister Matia Kasaija awarded the National Lottery operating license to ITHUBA UGANDA LIMITED for a tenure of 10 years.

The National Lottery offers numerous benefits, including the generation of funds for public projects, the creation of job opportunities, and direct contributions to the economic and social sectors. At the heart of our operations is the commitment to responsible play. ITHUBA Uganda is devoted to fostering a safe and responsible gaming environment, implementing measures to prevent problem gaming and ensure the welfare of our participants.

ITHUBA Uganda is determined to set the standards of ethical and efficient conduct in National Lottery operations. We strive to be the gold standard for lottery operations in Uganda and to serve as a model of excellence on a global scale.

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