City tycoon Patrick Bitature and the South African money lenders Vantage Mezzanine Partnership Fund II have recently been in the news over a loan dispute that has sparked debate and outrage on social media.
It is reported that the South African based Vantage Capital lent 10 million dollars to Mr. Patrick Bitature in 2014 hoping to repay part of his existing debts of Simba Properties Investment Company (SPIC) Limited and also build Skyz hotel.
The debt was to be repaid in December 2019. According to Vantage Capital, instead of Mr. Bitature and SPIC repaying back the loan, resorted to litigation claiming that the loan was invalid since the lenders weren’t formally registered to operate in Uganda, and hence were working outside the law and Mr. Bitature having used the money didn't have to pay it.
His lawyer, Fred Muwema of Muwema & Co. Advocates said that his client Mr. Bitature used the money ‘by mistake’ because he didn't know that Vantage was operating illegally in the country hence withdrawing from their contract because an illegal entity isn't allowed to do business anywhere in the world.
It was against this background that the high court Judge Musa Sekaana on May 9, 2022 ruled in Mr. Bitature and SPICs favour saying that Vantage wasn’t legally registered and had no legal rights to sue anyone in Uganda.
Speaking to the events, The Fatboy Show’s Olive Najjuma related this to Hamis Kiggundu’s case with KCB Bank in Kenya where the court ruled in his favour when he borrowed money from it and didn't pay back claiming that its activities were not recognized in Uganda.
“This puts Uganda and Ugandans in a precarious position when it comes to getting loans outside the country or even getting investors because someone is going to claim that they signed a 10 million dollar loan unknowingly. I don't think I've heard anything as ridiculous as that statement from Bitature’s lawyers,” she commented.
However her co-host James Onen aka Fatboy thought that Bitature’s case and defence would inspire more investors to want to do business in Uganda.
“What's going to happen is that other foreign investors will come here and register their companies and then they will go out and borrow money from institutions that are not registered. Perhaps from their home countries,” said Fatboy.
On the contrary, Olive still argued that there will be a hard time securing loans. The institutions will deem Ugandans, even those living an honest life as untrustworthy because of a few people who pose as ‘successful’. In addition she argued that this also affects other bank users who may have kept their savings with the bank.
“At the end of the day, this money that they borrow belongs to other people. Imagine fixing your money in a certain bank and you're earning interest. But for instance, when you reach a time and want to withdraw your 300 million shillings, the bank tells you they are unable to give you your money yet you thought it was safe there. But because it was given to a man who is refusing to pay back, then you can’t have your money,”Olive said.
Based on how this affects others, Fatboy added that it is unfair because it prompts the bank to increase the price of credit for all the bank users. He wondered whether the Bitature ruling makes him walk away free of any charge or compensation saying that it sounds too good to be true.
Olive replied that, “according to the judgments yes, but the Ham ruling was appealed and he was ordered that the case goes back to trial though I don't know what has happened to the case since then. But if our Judiciary frustrates these people, in the long run we are going to suffer.”
The Fatboy show is hosted by James Onen aka Fatboy, Olive and Sarah every weekday from 6am to 10am on RX Radio.