While Ugandan magnate Patrick Bitature and Johannesburg-based Africa-focused fund manager Vantage Capital remain at odds over a $32-million property loan, the Commercial Division of Uganda’s High Court has dismissed an earlier application by his entities, Simba Properties Investment Co. Ltd. and Simba Telecom Ltd., to prevent the advertisement and auctioning of his four prime properties in the continuing loan saga.
The recent court action, which marks a turning point in the dispute, comes nearly a week after Uganda’s central bank launched an investigation to determine whether the situation poses any risks to the country’s financial services industry, as part of a concerted effort to avoid potential disruptions resulting from the $10-million loan awarded to the businessman in 2014.
Since 2014, the $10-million loan has tripled in value to around $32 million after interest, charges, and penalties, as Vantage continues to demand repayment from Bitature for an overdue debt that is now considered to have gone bad.
Judge Stephen Mubiru argued in the court ruling issued on Wednesday that it was unfortunate that Simba Properties sued Robert Kirunda, Noah Shamah Wasige of Kirunda and Wasige Advocates, and Festus Katerega of Quick Way Auctioneers and Court Bailiff in their individual capacities, despite the fact that they were representing a known entity (Vantage Capital) when they advertised their properties for auction in the newspapers.
“On the basis of all the foregoing considerations, I found that this application and the underlying suit were entirely misconceived because they were instituted against agents of a known principal and because the matters put in issue in the suit are already the subject of an ongoing arbitral process,” Mubiru ruled.
“In the result, I found that a prima facie case had not been established,” he explained. “There were no serious questions of law and fact to be tried by this court to justify the grant of a temporary injunction. The application was thus dismissed with costs to the respondents and the underlying suit was struck out with costs to the defendants.”
The ruling implies that Vantage can proceed with the auction of Bitature’s Kampala real estate empire as part of its efforts to recover its outstanding loan against the businessman.
Bitature’s Kampala real estate empire includes the 30-unit Elizabeth Royal Apartments in Kololo, the Skyz Hotel in Naguru, and the Moyo Close Apartments in Kololo, a residential and commercial neighborhood in Kampala.