Equity Bank sold Simbamanyo House to Meera Investments Limited-a company owned by businessman Sudhir Ruparelia.
The property was sold to the businessman at USD 5 million (Ssh18.5 billion) through an auction.
“We are writing to inform you that Equity Bank Uganda Limited, as mortgagee, has completed the sale of land comprised in LRV 2220 folio 3 plot 2, Lumumba Avenue Simbamanyo House, after a public auction concluded on 8 October 2020 to the best evaluated bidder M/s Meera Investments Ltd, ” said Sam Kirubi, Equity Bank Uganda Managing Director.
Equity Bank recently put Simbamanyo House on auction after its now former owner Peter Kamya failed to pay a loan he acquired in 2012 to build a Hotel.
Simbamanyo House currently houses the Ministry of Gender.
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 advanced Simbamanyo with $6m.
The loans, which would make up a consolidate 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 north east of Kampala and facilitate the takeover of a prior facility advanced to Simbamanyo by Shelter Afrique.
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 is challenging the outstanding sum, saying it is only aware of $7.19m (Shs26.48b).
Simbamanyo Estates is also accusing Equity Bank Uganda of providing Equity Bank Kenya with an illegal cover to conduct business in Uganda where it has no jurisdiction.
The real estate company wonders how, according to court document, Equity Bank and Bank One, which provided bridge financing of ($10m) were drafted into the loan agreement yet Simbamanyo had never applied for any facility from the two banks later alone own a bank account in any of the said financial institutions.
However, in its defense, Equity indicates that Sambamanyo benefited and was aware of every financial transaction that was advanced to it.
Equity also argues 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.
Court documents indicate that Simbamanyo Estates had sought to offset the outstanding sum in a November 16, 2017 letter to Mr Kirubi.
In the letter, Simbamanyo, acting through NISK Capital, sought to restructure the loan with a $10m Standby Letter of Credit secured from Bank One.
Therefore, Equity argues, Simbamanyo or its agent were fully aware of all transactions and the case it had filed in March was a “guise or scheme” to defer the performance of its financial obligation that it has since defaulted on.
Mr Kamya, acting through Muwema Co Advocates and Solicitors last month said Equity Bank had breached contractual trust and engaged in unethical and illegal conduct.
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