By Executive Editor
South Africa’s financial institutions, like the International Development Corporation, project themselves as self-financing national development finance institutions whose primary objectives are to contribute to the generation of balanced, sustainable economic growth in Africa.
However, the experience of some Ugandan investors with the institution does not seem to align well with its alleged goals.
According to our sources, many African investors who have dealt with them have experienced trouble or worse, including our Ugandan investors, who have gone through bad experiences dealing with IDC.
Shocking details have now emerged of how the organ plays what sources say is ‘dirty’ on Ugandan investors, to the point of nearly stripping them of their hard-earned wealth.
According to sources, they show up to investors and offer part of the finance by taking all the security of the empire. They later enter into a contract agreement claiming that they will give them credit in a timely manner.
However, sources say, the moment you ‘fall in their trap and hand over to them the security documents after signing the financial credit agreement with them, that is where trouble starts with the deal overseen by someone favoriting them.
After a short while, they will reportedly begin breaching the contract’s financial obligation agreement from the onset by coming up with all manner of unjustifiable and unreliable excuses. This is after they have given you a small portion of the drawdown with high interest rates.
Sources add that this is a trick to make them not give you all the money you agreed on in the contract on time. As a result, costs of running the project, losses of business opportunities, and unnecessary expenses pile up on our investors, forcing the IDC to resort to reported blackmail by forcing them to increase the interest rates to give them more money.
They keep doing these things as they delay the project completion of the intended development by years, which creates a lot of cost overruns, losses of business opportunity, and other many losses and expenses to the investors and has a huge impact on the economy.
While this is going on, they are said to be earning more revenue from the investors in terms of interest, who are unfairly suffering losses from the cost overrun and the business revenue opportunities of a particular project.
In addition to this, they insist that the contract agreement be governed by South African law, and any arbitration should follow the same route where they already have a favorite to oversee the actions. ENS, the alleged co-founders of AFSA, is one of the entities they use for arbitration and is already their partner.
In case of any dispute, they run to their partner, where they in turn get granted exparty arbitration awards, which they then use with some local mafia to mislead our court system, corrupt it, and manipulate it to their advantage.
Sources say that although they brand themselves as a development corporation, many who have experienced their tactics say it should be renamed a destruction corporation.
In the process of seeking unfair redress, they reportedly unjustifiably manipulate the court process with the alleged help of some of the local mafias. They try to grab and take over empires, which are 20 times more than what they initially gave the investors as credit.
An example is the recent court case involving the IDC and Aya Investments, where they lent $50 million for the establishment of a project, but they are trying to defraud him by taking some of his assets valued in excess of $600 million. The other is tycoon Patrick Bitature, who faces the same dilemma with other similar South African creditors.
In 2014, Bitature secured a loan of US$10 million from a South African credit facility, which he was supposed to pay back starting in 2017.
Following the same experience with other investors, the court has now ruled that he has to cough up a whopping $35 million.
However, despite these tricks, sources say the investors are determined to fight tooth and nail to defend their assets and help the economy by maintaining their investments, which keeps creating more jobs and revenue for the government.
