UGANDA, Kampala | Real Muloodi News | An interim order issued by High Court registrar John Paul Eduko has directed Bank of Baroda Uganda Ltd to cease the sale of Shumuk Aluminium Industries Ltd’s plant in Nakawa and one of its prime properties in Naguru-Lugogo UMA showgrounds.
This order comes amidst a legal dispute between Shumuk and the bank, with the court deeming the proposed sale as ‘illegal.’
Bank of Baroda had previously issued a ‘sale notice’ for the aforementioned properties, setting a 30-day ultimatum for Shumuk to settle an outstanding loan.
However, the court’s interim order has halted these proceedings until the final disposal of the lawsuit filed by Shumuk against the bank.
In the lawsuit, Mukesh Shukla, the CEO of Shumuk Group, contests the bank’s claims regarding a loan amounting to USh6.3 billion, as well as additional sums approximating USh1.3 billion.
Shukla maintains that the group has settled its obligations to the bank and questions the validity of the outstanding debt claimed by the bank, asserting that the loan was obtained for working capital purposes.
The bank, on the other hand, asserts that Shumuk Group still owes them a significant sum totalling USh18.4 billion, including accrued interests and unpaid sums.
In response to the bank’s ‘sale notice,’ Shukla argues that it is unjust for the bank to attempt to auction properties that served as collateral for a loan that Shumuk had already repaid.
Shumuk Aluminium Industries, founded in 1984, remains one of Uganda’s leading manufacturers of aluminium products, employing over 1000 workers directly and indirectly.
The potential closure or takeover of Shumuk by the Bank of Baroda could have significant repercussions, including job losses and a decline in tax revenue for the government.
Represented by Badru Bwango of Bwango, Araali, and Company Advocates, Shumuk Group continues to contest the bank’s actions in court.
The registrar’s interim order serves to temporarily halt the bank’s sale proceedings, pending the resolution of the ongoing legal dispute.
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