UGANDA, Kampala | Real Muloodi News | Tirupati Development (U) Limited, a real estate development and construction company, has filed a lawsuit against KCB Bank alleging fraud, breach of statutory duty, and money laundering.
The lawsuit was launched in the High Court of Uganda, in response to irregularities stemming from a USD 7,000,000 syndicated loan facility given to Tirupati by KCB Bank in July 2012.
According to Tirupati’s complaint, which was submitted by Aegis Advocates, Kirunda and Wasige Advocates, the plaintiff Tirupati presented KCB Bank with a series of ownership certificates to its properties as security for the loan.
“By the loan agreement between the plaintiff and the defendant, the parties agreed that an amount of US$5,140,000 was to be disbursed to the plaintiff on account of the syndicated loan facility between July 2012 and August 2013. A further disbursement of USD 1,584,000 between September 2013 and August 2014 was to be made. A final disbursement of USD 276,000 was to be effected in September 2014,” the suit reads in part.
While the defendants [KCB Bank] promised to transfer a total of USD 7,000,000, Tirupati’s attorneys claim that only USD 6,990,000 was paid.
“KCB agreed to charge the plaintiff’s loan negotiation fees in the sum of 0.5% of the loan amount. This amounted to USD 35,000.”
Contract Violation
Tirupati has sued KCB Bank for contract breach, claiming that the complete agreed payment of USD 7,000,000 was not disbursed. Tirupati also claims their account was charged for loan negotiating expenses over the agreed-upon sum.
“They [KCB] failed and willfully refused to provide the Plaintiff with a breakdown of how the loan negotiation amount charged was arrived at, they debited the Plaintiff’s accounts to meet costs of a suit after the parties had agreed that each party would bear their own costs in respect of the Consent Judgment in Civil Suit No. 516 of 2017.”
Tirupati’s attorneys further claim that in August 2016, KCB Bank created and ran two distinct US Dollar-denominated loan accounts in Tirupati’s name without their knowledge or permission. The KCB Kenya account number was 1059906732, while the KCB Uganda account number was 2150226057.
“In January 2017, the KCB Uganda opened and operated another new US dollar current account No. 2290351628 in the names of the Plaintiff, without the Plaintiff’s authorisation, consent nor knowledge,” lawyers added.
Money Laundering
Tirupati claims that KCB Bank’s suspected activities and transactions comprised money laundering, adding to conspiracy and fraud.
“The Plaintiff has received conflicting statements of transactions on its accounts covering the period of the entirety of the loan and beyond the consent judgment, which clearly indicate highly suspicious transactions akin to money laundering and theft by the 2nd and 3rd Defendants [KCB Uganda and KCB Kenya] collectively,” lawyers say.
These transactions demonstrate that KCB Bank neglected to manage the risk of financial and IT fraud by keeping different ledgers for the plaintiff’s accounts.
Tirupati claims that the KCB Bank used their US Dollar and Uganda Shilling accounts in the way illustrated above, including phoney loan extensions, to obstruct any audit record.
“These actions were also calculated to avoid triggering any statutory requirements by Bank of Uganda and the Financial Intelligence Authority, as regulators of financial institutions, to file suspicious activity reports required by law, and avoid scrutiny by regulators and law enforcement in the two jurisdictions of Uganda and Kenya,” according to the plaint.
Tirupati claims that KCB Bank continues to transfer funds illegally through her listed accounts to this day. These actions are exposing the plaintiff, its shareholders, and directors to the financial and legal repercussions and sanctions that result from the accusation of engaging in unlawful money laundering and plausible terrorist financing, corrupt practices, or payments obtained through drug or child and sex trafficking through the unauthorised use of her accounts, endangering the whole business enterprise.
Tirupati requests an order from the court stating that the KCB Bank misused the plaintiff’s monies to the tune of US$ 995,466.78 and that the amount is to be repaid to the plaintiff in additional losses.
They also want the court to order KCB Bank to bring back 20 Certificates of Title belonging to Tirupati that they are illegally holding, as well as an order compelling them to pay the highest plausible autonomy of accumulated financial penalties authorised by law for engaging in money laundering using Tirupati’s accounts.
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