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I signed US$ 10 Million Loan By Mistake, Lenders Have No Claim – Bitature

By An Executive Editor

Businessman Patrick Bitature of Simba Group has said that he signed the US$ 20 million loan by mistake.

Speaking through his lawyer Fred Muwema, Bitature says the said lenders have no claim because they don’t exist.

In an interview with Uganda Radio Network, Bitature through his lawyer acknowledged that indeed he contracted a loan agreement with Vantage Mezzanine Fund II Partnership, a South African entity but when it was discovered that this entity was illegal, this contract collapsed because an illegal entity cannot do legal business.  

“The loan agreement was signed in 2014 by other lawyers but when we came in as new lawyers, we audited the documents and we found that there was a mistake and we raised it,” Bitature said.  

He added that even if there was agreement between him and Vantage and that money exchanged hands, the moment an illegality is discovered, the agreement becomes null and void. 

“In the case of Sudhir, didn’t he sign an agreement to pay Bank of Uganda; didn’t the Supreme Court of this country nullify that agreement and said the receivership was illegal?” he asked. “There are also very many judgements to that effect. So, when you do an illegal agreement, even if we sign and even put figure prints, the agreement is illegal; it will be nullified whether you paid money or not. So now I have no opponent, I’m in the ring alone!” 

According to Bitature, after breaking the law, they as law abiding citizens would not continue dealing with Vantage.   

On May 9, High Court Judge Musa Ssekaana ruled that Vantage Mezzanine Fund II Partnership has no legal basis to sue anybody in Uganda. The entity had rushed to the High Court to seek a judicial review over the decision by the Uganda Registration’s Services Bureau-URSB to refuse the transfer of shares to it from four of Bitature’s companies that include; Simba Properties Investment Co. Limited, Simba Telecom Limited, Linda Properties Limited and Elgon Terrace Hotel Limited. 

The transfer of shares arose after Bitature failed to meet his part in the agreement to pay back a loan he had contracted in 2014 to help in his real estate development. According to 2019 court filings, Vantage provided Bitature with $10million and agreed to such terms that if he fails to pay this money, it would be turned into shares to Vantage.

The agreement also stated that, in case of any disagreement, they would be solved through arbitration not court. That’s why High Court judge Boniface Wamala ruled that his court had no power to hear the dispute and referred it to arbitration. 

The Monitor newspaper this week carried an advert in which Quickway Auctioneers and Court Bailiffs acting on behalf of Vantage, put up for actioning Bitature’s properties if he fails to pay his creditors within 30 days.  The advertised properties include Elisabeth Royal Apartments, Protea Hotel Naguru and Moyo Close Apartments; all managed under Simba Apartments.

In the interview Muwema said this was done with malice to soil the good name of Butature. He said although the arbitration process which was supposed to happen in London was yet to take off, they were stunned to read in the media that Vantage was moving to attach his client’s properties. 

On why the parties went to court in the first place, Muwema said the agreement was unfair to Bitature because it levied unconscionable interest rates. 

In the commercial division, Bitature had also objected to taking the case to arbitration arguing that that particular clause was included in the loan agreement under duress but the judge wouldn’t have any of this. He scornfully ruled: “In my view a feeble claim of duress and/or undue influence of the nature as this one amounts to an insult of own intelligence on the part of the Respondents and their advocates.” 

However, Muwema said unfair agreements are a common thing even to big entities like governments. He added that if the judge had interrogated the issue farther, he would have realised that indeed there was undue influence.

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