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Hotel Diplomate dispute goes to Museveni

By Vision Reporter

Added 5th June 2011 03:00 AM

SHUMUK Group of Companies has petitioned President Yoweri Museveni over Hotel Diplomate ownership wrangles. The group is also seeking to recover up sh963m in rent arrears.

SHUMUK Group of Companies has petitioned President Yoweri Museveni over Hotel Diplomate ownership wrangles. The group is also seeking to recover up sh963m in rent arrears.

SHUMUK Group of Companies has petitioned President Yoweri Museveni over Hotel Diplomate ownership wrangles. The group is also seeking to recover up sh963m in rent arrears.

“In light of keeping our Ugandan transformation dreams, I hereby seek an appointment for your assistance and guideline towards stalled projects. The company’s planned investment of $2m (about sh4.8b) is stalled due to illegal occupation by the previous owner on the pretext of diplomatic immunity,” Mukesh Shukla, the group boss, wrote in a February 28 letter.

The hotel has been a subject of dispute between Springs International Hotel, a tourism subsidiary of the Shumuk Group, and Bonny Katatumba, a city businessman.

While Shukla claims that Katatumba legally handed over the ownership of the hotel to Shumuk in 2009, Katatumba maintains that the group wants to fraudulently take away his property.

“I have taken him (Shukla) to court for trying to defraud me of my property. What he is doing is subjudice,” said Katatumba.

“I took him to court for fraudulently failing to pay and taking my title.”

Shukla accuses Katatumba of trying to use his office as the Pakistani honorary consulate to block him from taking over the property. Katatumba instead says the group is causing a diplomatic wrangle between Pakistan and India.

Katatumba alleged that Shukla, an Indian, had accused him before the Indian government.

Benson Tusasirwe, Katatumba’s lawyer, said his client never sold Hotel Diplomate to Shukla, but that the two entered into an agreement to purchase Blackline House, a different property also owned by Katatumba on Colville Street in Kampala.

“That was even a security property, but it was paid back,” said Tusasirwe. “The matter is in court. There was never a sell to Shukla and his company. What happened was totally different.”

“Instead, Katatumba is demanding that Shukla pays him rent arrears for Blacklines House.”

The dispute over the property arose out of a deal allegedly reached between the two parties to have the Shumuk Group take over the hotel from Katatumba in 2009. However, Katatumba secured a court injunction, challenging the deal. High Court Judge Lameck Mukasa in February 2010 ruled in favour of the Shumuk Group and asked Katatumba to hand over the property.

The ruling also barred the Katatumba family from the property. However, Katatumba is still occupying the property, despite a court order to vacate it more than a year ago.

The hotel also houses the Pakistani Consulate. Though foreign embassies enjoy diplomatic immunities, this does not, however, shield the Consulate or Katatumba as the law only covers the function performed by the honorary consul not the office or individual.

In a March 22 letter, Joy Kabatsi, the President’s principal private secretary, appealed to the Police chief Maj. Gen. Kale Kayihura to assist the Shumuk Group to take possession of the hotel in accordance with the law. “I have carefully perused through the relevant documents and noted that the registered proprietor of the property is Springs International Hotel,” said Kabatsi.

The letter indicated that Katatumba entered into a hotel management lease with George Kamugisha of Springs International Hotel on February 28, 2011. “He (Kamugisha) tried to occupy the premises, but was resisted by Boney Katatumba,” Kabatsi’s letter read.

“The dispute was referred to the High Court and it was decided in favour of Shumuk Springs Development and Springs International Hotel. The Police carried out investigations into the matter and concluded that the continued occupancy of the premises by Boney Katatumba is illegal,” the letter added.

Another investigation report dated March 28 by the Inspectorate of Government, which was requested by Katatumba, found out that Katatumba signed all the lease transfer papers himself.

“You, as director, affixed your signature thereon, together with another director and the company seal is duly impressed. The transfers are accompanied by a resolution of Hotel Diplomate Limited authorising the sale of the properties,” the report stated.

The IGG also said the signatures in the transfers have never been contested by Katatumba. He also noted that although the caveats were presented by members of the Katatumba family, it was now Katatumba following it up.

Katatumba’s woes started in August 2008 over a $5m deal for the sale of Blacklines House.

Katatumba later went to court, accusing Shukla of taking advantage of pressure from his creditors to force him to accept a purchase price of $4m as well as sign agreements to deposit title deeds for Hotel Diplomate and Katatumba Resort in Lake Victoria as security.

However, Blacklines House is now called Shumuk House. It remains to be seen how the dispute will end.

Hotel Diplomate dispute goes to Museveni

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