Simbamanyo building located at Lumumba Avenue was sold by public auction by Equity Bank after its former owners, Simbamanyo Estates Limited failed to pay loans worth $10 million (about 40 billion).
Due to the notice dated October 8, Equity Bank informed the tenants on the building including the Ministry of gender, labour and social development, that the building was sold to Meera Investments who was the best evaluated bidder. However all tenants were put on notice of the said auction via an advert in the Daily Monitor newspaper dated September 8.
“The new owners will be getting in touch with tenants individually to out the modalities for the ownership transition.” Said the bank
Meanwhile, “We trust you will accord the new owners all courtesy and all future rental payments and other tenant inquiries and obligations will be handled by Meera InvestmentsLimited or their agents,” Said Managing Director Sam Kirubi in the letter.
According to the letter written by Crane Management Services said that Simbamanyo building was sold to Meera Investments thereby making them the new landlords.
“No one else, whether Simbamanyo Estates, Peter Kamya or any other person claiming through them, has any power or authority over the said property. Anybody else who purports to deal with the said property in any manner inconsistent with that of Meera Investments commits an offence and is liable to legal sanctions,”. Said Crane Management Services in charge of Risk management in the letter, the development comes after the building was auctioned by the Bank for recovery of more than $10.8 million.
On 6th Tuesday, the Commercial Court dismissed an application in which Simbamanyo Estates has sought to stop the sale pending an intended appeal to challenge the loan which was advanced to the company in 2017. Simbamanyo proprietors also failed to comply with the court order which directed them to deposit 30 percent (Shs12 billion) of the loan amount.
The building on Lumumba Avenue and other properties were advertised for sale in September for recovery of more than $10.5 million loan for Equity Bank. The properties were guaranteed to Equity Bank Uganda as security to get the loan in November 2017.
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 the proprietors of Simbamanyo Estates Limited defaulted on their loan obligations when they failed to pay any money as required by the contracted signed.
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.