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Basajjabalaba sued over 6bn loan

By Vision Reporter

Added 12th March 2006 03:00 AM

KAMPALA city tycoon Hassan Basajjabalaba has been given 15 days by the High Court to file his defence against a suit in which the Uganda Development Bank (UDB) is seeking to recover US$3m (over sh6b with interest).

KAMPALA city tycoon Hassan Basajjabalaba has been given 15 days by the High Court to file his defence against a suit in which the Uganda Development Bank (UDB) is seeking to recover US$3m (over sh6b with interest).

By Vision Reporter

KAMPALA city tycoon Hassan Basajjabalaba has been given 15 days by the High Court to file his defence against a suit in which the Uganda Development Bank (UDB) is seeking to recover US$3m (over sh6b with interest).

“Should you fail to file your defence within the prescribed period, the plaintiff may proceed with the suit and judgment may be given in your absence,” the summons signed by the Commercial Division registrar said.

UDB, which is represented by Dr. Joseph Byamugisha, sued Basajjabalaba, his company Basajjabalaba Hides and Skins (U) Limited and three directors: Shamim Basajja, Aisha Basajja and Iddi Basajja, for the recovery of US$3m (sh5,387,000,000).

UDB demands a total of sh6,078,144,970.65, with an interest rate of 12% per year from December 5, 2005 until payment in full. It also seeks general damages and costs of the suit.

The suit filed on February 27, stated that the defendants borrowed the money on June 25, 2002, to buy hides and skins.
The loan, which was guaranteed by all the directors, was to be repaid within 24 months.

To secure the loan, the defendants presented a certificate of title of land of Plot No 5 Block K Kampala, Kyaddondo, Mengo and a valuation report.

The report said, “Development on the land comprised of a storey highly executive commercial building with additional basement, lower ground floor parking together with shops facing Luwum Street and Market Square. The site is almost fully covered with building.”

But the bank said the report was false and the land referred to, which is Plot 24 William Street, has a very old house with small lock-up shops and an open space used as a restaurant and is of much less value than the sh11.5b quoted in the report.

According to UDB, the defendants also presented falsified accounts and lied that they were meeting their loan obligations with Standard Chartered Bank and the East African Development Bank and their working capital had grown from sh1,7b in 1998 to sh12.8b in February 2002, all of which turned out to be false.

UDB said when it tried to put the company under receivership, the State minister for finance in charge of general duties, halted the process, saying Bank of Uganda was working out a rescue package for Basajjabalaba, which it failed to do.

Basajjabalaba sued over 6bn loan

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