Bank of Uganda takes interest in $10-million loan dispute between Patrick Bitature, Vantage Capital

In an effort to avoid potential disruptions resulting from a dispute between South African lender Vantage Capital and Ugandan businessman Patrick Bitature over a $10-million loan awarded to the businessman in 2014, Uganda’s central bank has launched an investigation to determine if the situation poses any risks to the country’s financial services industry.

The move comes three weeks after Vantage Capital hired auctioneers to sell prime properties owned by Bitature’s Simba Telecom Limited but mortgaged through his real estate holding, Simba Properties Investment Company Limited, causing the Apex bank to take an interest in the dispute.

Tumubweine Twinemanzi, the executive director in charge of supervision at the Bank of Uganda, wrote to Vantage’s lawyers, Kirunda and Wasige Advocates, that the potential market valuation of the listed properties for sale and their common ownership make it highly likely that the affected debtor is a systemic borrower within the country’s commercial banking landscape.

Written by the Apex bank’s executive director on May 18, the letter represents the Bank of Uganda’s first line of concern, raising the question of whether other local banks have lent money to Simba Group and if those loans are in good standing.

According to the Monitor, there is no evidence that Simba Group has not met its loan obligations with other local lenders. This news follows the publication of an auction notice for Bitature’s prime properties.

Bitature is the founder, chairman, and group CEO of Simba Group, an East African conglomerate. He is one of Uganda’s wealthiest people.

The businessman, who is also the newly appointed chairman of the board of Bollore Logistics Uganda, has won a contract to do the majority of the logistics work on the company’s oil fields and pipeline in western Uganda.

When confronted with the repayment of the $10-million loan he obtained from Vantage Capital, which has tripled in value to around $30 million after interest, charges, and penalties, Bitature clarified matters in a personal statement, in which he acknowledged receiving the loan but said difficulties arising from delays in Uganda’s oil and gas sector undermined his ability to repay.