Simbamanyo, the building that is housing among others, the Ministry of gender, labour and social development is due for sale this Sunday.
Watchdog Uganda website understands that the bank has given owners upto Sunday, to pay off the outstanding loan or have the building sold, which was the loan security.
The owners have failed to pay the outstanding loan with only three days left.
The building on Lumumba Avenue and three plots of land in Mutungo, Nakawa Division will be sold on September 7 and 11 respectively for recovery of more than $10.5 million loan.
The two properties were guaranteed to Equity Bank Uganda as security to get the loan in November 2017.
However, Equity Bank Uganda through its lawyers is accusing the owners of Simbamanyo Building under their company Simbamanyo Estates Limited for defaulting on their loan obligations.
They allege that the company has never paid a single dollar to the bank nor did they ever devise means of reviewing the loan repayment terms or seeking for a funder to finance the said loan.
According to the documents, Simbamanyo Estates forfeited the building on Plot 2 Lumumba Avenue and three plots of land at Mutungo in Nakawa Division.
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.
Through its lawyers, Equity Bank states that the proprietors of Simbamanyo Estates Limited defaulted on their loan obligations when they failed to pay any money as required by the signed contract.
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.
The advert shows that the building is housing the Ministry of Gender and a land in Mutungo in Nakawa Division under Simbamanyo Estates Limited are due for sale on September 7 and 11 this year respectively.
But upon pleas by Simbamanyo Estates, the Commercial Court has issued an interim order stopping the sale.
Court registrar, Susan Kanyange halted the sale of the multibillion properties until the judge determines the issues between Simbamanyo Estate Limited and the two banks.
Registrar Kanyange directed that the sale of the properties can only be stopped after the company has paid 30 percent of the outstanding loan amount to the bank.
“I order that the applicant (Simbamanyo Estate Limited) deposits 30% of the outstanding amount that is $10,514,500. So 30% of that. I am not persuaded with due respect to counsel for the applicant,” Kanyange ruled.
The order to pay 30 percent of the outstanding loan followed an argument in which Equity Bank through its lawyers argued that if any sale is to be stopped, the proprietors of Simbamanyo Estates Limited had to pay 30 percent to the bank.
Simbamanyo Estate Limited through its lawyers of Muwema and Advocates have since sued Equity Bank Uganda and Equity Bank Kenya challenging the loan advanced to it citing illegalities for which the banks cannot benefit.
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