• July 30, 2021
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High Court Dismisses Simbamanyo Estates Appeal, Ordered To Pay Costs To City Tycoon Sudhir Ruparelia

High Court Dismisses Simbamanyo Estates Appeal, Ordered To Pay Costs To City Tycoon Sudhir Ruparelia

The Commercial High Court land Division has Friday thrown out an appeal case in which the owner of Lumumba Avenue based Simbamannyo building and Afrique Suites Hotel located in Bugolobi, a Kampala suburb sought to stop Dr Sudhir Ruparelia from taking over the two buildings, which he bought from Equity Bank, after the owner failed to clear the bank loans valued in billions.

Justice Susan Abinyo, in a ruling delivered by e-mail concluded that Simbamanyo Estates did not present to the court acceptable grounds for the court’s consideration to halt the orders of the Registrar Commercial Court, issued on February 17, 2021.

The judge also ordered legal costs for bank, Meera Investments Ltd, Luwaluwa Investments Ltd, and the Commissioner Land Registration incurred in the appeal.

An earlier ruling by the High Court had also dismissed issues presented by the proprietors of Simbamanyo Estates, trying to save the estate that was sold to Meera Investments Ltd, through public auction.

Following the ruling, Equity Bank lawyers will now have to file a bill of costs to be approved by court.

Justice Amanyo confirmed that stopping the sale would have infringed the Bank’s right to be heard and also inconvenienced those who prepared for the auction which was advertised on September 8 fixing the sale date.
On October 8 this last year, Simbamanyo Estates Limited filed an application seeking for express orders to stay the sale of its properties which took place on the same day.

Court records show that on the same day, the bank sold Simbamanyo building housing among others the ministry of gender on Lumumba Avenue and Afrique Suites Limited, a four-star hotel at Mutungo Hill, Nakawa Division on the same day.

The High Court, Commercial Division has since dismissed pleadings in which the proprietors of Simbamanyo Estates Limited had sought to stop the sale.

Background

It all began when the two entities of Equity Bank Uganda and Equity Bank Kenya contributed money together of $3.5m and $2.5m respectively of which Simbamanyo Estates challenged saying that it only considered $7.19m (Shs26.48b), hence accusing Equity Bank Uganda of conniving with Equity Bank Kenya to illegally carry business in Uganda where it has no jurisdiction.

Simbamanyo contended that it started servicing the loan but required more financing, which culminated in two additional facilities granted by Equity Bank Uganda of $1.2m (about sh4.3b) for the completion of the construction of a hotel at Mutungo, a Kampala suburb, and to take over a prior facility from Shelter Afrique hotel.

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In addition, the estate company noted that Equity Bank Uganda and Kenya brokered a new deal with Bank one, a Mauritius-based bank, to lend $10m (sh36b) to it to pay the old loan with Equity Bank lenders.

In fear of the impending adverse actions at the time, Simbamanyo says it accepted the Bank one loan offer, which was made on November 16, 2017, to bridge $10m Mauritian loan for purposes of refinancing the existing loans for a period of 24 months.

“Following the Mauritian loan, Equity Bank made a corresponding but fictitious bi-party loan offer for the same amount and tenure to the plaintiff,” the document reads, adding that the fictitious loan amounted to fraudulent misrepresentation by Equity Bank.

Putting the estate’s dissatisfaction aside, 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 intended to enforce the disputed credit facility advanced on November 30, 2017.

This is how Equity Bank sold the property to Sudhir’s Meera Investments Company Limited at a whopping $5million approx. (shs18.5 billion) in an effort to recover Bank’s unpaid loan amounting to about $8.1million (approx. Shs30billion).

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