By Felix Osike
THE Government has negotiated with Standard Chartered Bank to bail city tycoon Hassan Basajjabalaba out of a $22m debt, a senior Ministry of Finance official has said.
Basajjabalaba accumulated the debt two years ago to finance his hides export business and real estate acquisitions.
“We have assisted Basajjabalaba to settle the debts but not using government money,” the official said.
On April 26, 2003 President Yoweri Museveni told a public rally in Kabwohe, Bushenyi district, that he had asked the Bank of Uganda governor to rescue Basajjabalaba (right). Governor Tumusiime Mutebile declined to comment on the issue.
In the deal, the local firm of the HSBC Bank, Equator Bank, deposited $11m in Standard Chartered and the latter was urged to forego the $11m balance.
In 2002, the bank listed sh24.4b worth of bad debts, more than $11m. In 2003, sh1.74b was recorded.
Basajjabalaba was compelled to hand over titles of some his properties to the HSBC as collateral for the $11m loan. He was until recently among the leading exporter of hides and skins.
His assets include Kampala International University, City Complex Building, Mbarara and Kabale Regency hotels.
The Government has advised him to sell some assets to pay the debt, the source said.
The HSBC and Standard Chartered managers declined to comment.
Governmnet has an account with HSBC, the Hong Kong Shanghai Banking Corporation.
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