Uganda | Kampala | Real Muloodi News | The battle between Vantage Capital and Simba Properties Investment Company Ltd (SPIC) has tightened.
Vantage Capital is an Africa-focused fund manager with offices in Johannesburg, South Africa. It was founded in 2001 and has over USD1.4 billion in net worth, with 33 investments in 11 African countries.
SPIC borrowed from Vantage Capital (with Patrick Bitature as their guarantor and promotor) a loan of USD10 million to refinance a portion of the Simba Group’s existing debt and to fund the completion of Simba’s Skyz Hotel in 2014.
However, it is alleged that since then, Patrick Bitature has never paid back any of the money he borrowed, arguing that the company isn’t legally registered in Uganda.
Bitature allegedly argues that he cannot make the mistake of doing business with ‘an illegal company.’
Vantage Capital has fired back at Bitature’s Simba Group saying, his tricks and loan behaviours scare away international investors, especially those who hoped to carry on financial business in Uganda.
Vantage Capital notes that Bitature and Simba Group granted security for the USD10 million loan in the form of charges over their shares and legal mortgages which were registered over certain properties they own.
Part of the Vantage Capital public notice stated: “Instead of making efforts to repay the Loan, the Simba Group and Mr Bitature resorted to litigation, claiming that Vantage’s Loan was invalid and signed under duress and therefore Simba, having used the money, did not have to repay it,” they said.
“Unfortunately, such tactics have been employed by Mr Bitature before, both against Vantage and against other Simba Group lenders, including a South African bank. All of the above took place well before the rise of the Covid-19 pandemic,” the company added.
“We note that the behaviour of the Simba Group and Mr Bitature in borrowing money from international lenders and then denying its obligations does not reflect well on Uganda’s international image as an investment destination, nor does the ease at which the Simba Group has been able to abuse the legal system and its institutions to frustrate its lawful creditors.”
“However, we remain faithful and confident that justice will ultimately prevail…unfortunately, such tactics have been employed by Bitature before, both against Vantage and against other Simba Group lenders, including a South African Bank. All of the above took place well before the rise of the Covid-19 pandemic,” said Vantage Capital in a public notice.
Recently, the Uganda Registration of Services Bureau (URSB) allegedly blocked Vantage’s attempt to exercise security rights over Simba Group’s shares.
Vantage sought redress from the High Court of Uganda to compel the URSB to give effect to its legitimate shares.
The court dismissed Vantage’s application based on the reasoning that Vantage Capital was not registered in Uganda and therefore lacked the legal standing to sue or be sued in Uganda.
“In the present case, the applicant contends that it is a partnership, which means that it must comply with the law which requires registration to have the capacity to sue or be sued in Uganda. The applicant’s status as a recognised entity in South Africa has not been proved to the satisfaction of this court since there is no single registered document that has been produced before this court apart from a few pages of the unregistered partnership agreement,” Justice Musa Ssekaana gave a ruling in the matter.
However, in a public notice made by Vantage Capital, it is not ready to give up on pressurising Bitature to pay back their money now amounting to USD34 million as loan and interests.
“Vantage will not be deterred by the Simba Group’s and Bitature’s continued abuse of court processes and public institutions, nor by their recent PR campaign in their ongoing efforts to avoid their creditors and lawful obligations. Vantage will persist in the recovery of its long-overdue loan, exercising its rights against the security if need be,” said Vantage Capital in a public notice.
As of now, Bitature’s woes have apparently multiplied as the courts have quashed his application seeking protection from prosecution over the loan from Vantage.
The Commercial Division of the High Court of Uganda dismissed the application, which Patrick Bitature filed seeking protection from being sued privately by Vantage Mezzanine Fund II as it seeks to recover a USD10 million loan given to Bitature eight years ago.
This was after Bitature, through his lawyers Muwema and Co. advocates, ran to court seeking a temporary injunction against Vantage, which had filed a private prosecution over the loan.
While delivering his ruling on Tuesday, May 24th, Justice Stephen Mubiru dismissed Bitature’s application because it lacked a legal basis.
He ruled that “the applicants’ need for such protection must be weighed against the corresponding need for the respondents to be protected against injury resulting from being prevented from exercising their legal rights for which it may not be adequately compensated in damages…I find that the balance of convenience is in favour of the respondents (Vantage)”
The judge also ruled that Bitature’s lawyers, Muwema and Co. advocates should personally cater for the application costs since they did not professionally advise their client not to institute a case that lacked legal basis.
The evidence further discloses that the securities executed for the borrowed money were in the names of Bitature’s properties which now stand to be auctioned.
Some of the properties to be auctioned include Simba Properties Investment Co. Ltd, Simba Telecom Ltd, Linda Properties Ltd, and Elgon Terrace Hotel Ltd.
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