• Sun. May 28th, 2023

UGANDA, Kampala | Real Muloodi News | A high-end luxury apartment building off Lugogo Bypass is at risk of being put up for auction by Grant Thornton Management Limited (GTML). 

The forty-four apartment residential property, situated at Plot 65A Lugogo Bypass, is owned by city businessman Vijay Reddy Movva’s company, Visare Uganda Limited (VUL). According to Open Corporates, VUL is the company behind the real estate brokerage site Houseify

In 2017, Reddy took out a loan from the Kenya Commercial Bank (KCB) to complete construction of the apartments. However, he encountered challenges servicing the debt.

By 2019, Reddy owed KCB Bank five hundred and fifty thousand United States dollars. It was around this time that KCB began the process to sell off the property to recover its money.

Reddy was given until December 31, 2019 to deposit the money he owed the bank, or lose control of his building.

On the last day of the payment deadline, Reddy struck a deal with GTML, offering twelve of the forty-four units as collateral. GTML then paid KCB Bank the money owed by Reddy.

GTML is now claiming that all forty-four units are theirs to sell if Reddy cannot pay back the money he borrowed.

GTML has the support of the Commercial Court, which ruled in May 2021 that GTML could proceed with the sale of the entire building.

In a turn of events, however, GTML discovered they could not sell off the property since Reddy did not have approval from the City’s Planning Authority to build his property. GTML is now asking for four million dollars in compensation.

Reddy has appointed lawyers to challenge the court verdict and save his property. He claims that GTML only has authority over the original 12 apartments sold to them, not the entire building.

There is debate over whether the transaction qualifies as a sale and purchase, or simply a money lending agreement. This debate has now lead to an investigation of GTML. 

GTML in Hot Water

Following reports that GTML was involved in a legal battle with a Reddy and his company, Bank of Uganda (BoU) began investigating GTML for engaging in money lending without the required licensing.

BoU summoned GTML Boss, Anil Ramachabal Patel, and his business partners on 17th August for questioning.

The Money Lenders Act, 2016 (the Act) provides for the licensing and operation of money lending business in Uganda. The purpose of the Act is to legitimise and build confidence in money lenders who had for a long time remained unregulated.

Any company wishing to undertake money lending business is required to apply for a license from the Uganda Microfinance Regulatory Authority (UMRA), under the supervision of BOU, by submitting its incorporation documents, the particulars of its directors and secretary and paying the requisite fee.

However, it appears that GTML has never fulfilled these requirements to qualify as a money lending company.

GTML therefore risks closure, since Bank of Uganda officials have launched investigations into the daily operations of this audit firm.

The case remains open for now, as Reddy and his advocates appeal to the court to save his property.


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