MP jailed in Luzira for bank debt
Apr 08, 2010
SANTOS Eruaga, the MP for East Moyo county in Adjumani, was on Wednesday sent to Luzira Prison over failure to pay back a debt of sh169m owed to dfcu Bank.
By Andante Okanya
and Justus Akampa
SANTOS Eruaga, the MP for East Moyo county in Adjumani, was on Wednesday sent to Luzira Prison over failure to pay back a debt of sh169m owed to dfcu Bank.
He was committed to civil prison by Commercial Court registrar Gladys Nakibuule after failing to honour a consent judgement of June 2008. A warrant for his arrest was issued by the registrar on March 18.
“Eruaga has neither obeyed the decree nor satisfied the court that he is entitled to be discharged from custody. You are hereby commended and required to take and receive him in civil prison for a period not exceeding six months or until the decree shall be fully satisfied,†reads the warrant.
The case arose after Eruaga and his business partner, Caesar Tokuma, applied for a lease to dfcu Bank in 2004 for two Isuzu buses for a period of 36 months.
Eruaga took a personal guarantee for payment of the lease for their transport company, Lodi Roadways.
The application was approved and a lease agreement was signed in early 2005.
But he defaulted on payment, which forced the bank to drag him to court the same year.
After Justice Geoffrey Kiryabwire heard the case, the parties mediated on the matter, which led to a consent judgement, where Eruaga was ordered to pay sh12m per month with effect from June 2008.
The MP failed to honour the judgment and has not paid a single cent.
He also failed to pay the costs of the suit, and money to the dfcu lawyers amounting to sh3.5m.
It was on these grounds that the legal representatives of dfcu, Ligomarc Associates, asked for a warrant of arrest for Eruaga.
On Wednesday, before he was committed to prison, the MP first agreed to pay sh10m, but later changed his mind and opted for prison.
He pleaded to be given time to sell some of his properties to enable him pay the money.
The bank argues that the MP has shown a non-committal attitude and deliberately failed to honour the consent order. It also claims it has suffered financial loss as a result of the arrears.
and Justus Akampa
SANTOS Eruaga, the MP for East Moyo county in Adjumani, was on Wednesday sent to Luzira Prison over failure to pay back a debt of sh169m owed to dfcu Bank.
He was committed to civil prison by Commercial Court registrar Gladys Nakibuule after failing to honour a consent judgement of June 2008. A warrant for his arrest was issued by the registrar on March 18.
“Eruaga has neither obeyed the decree nor satisfied the court that he is entitled to be discharged from custody. You are hereby commended and required to take and receive him in civil prison for a period not exceeding six months or until the decree shall be fully satisfied,†reads the warrant.
The case arose after Eruaga and his business partner, Caesar Tokuma, applied for a lease to dfcu Bank in 2004 for two Isuzu buses for a period of 36 months.
Eruaga took a personal guarantee for payment of the lease for their transport company, Lodi Roadways.
The application was approved and a lease agreement was signed in early 2005.
But he defaulted on payment, which forced the bank to drag him to court the same year.
After Justice Geoffrey Kiryabwire heard the case, the parties mediated on the matter, which led to a consent judgement, where Eruaga was ordered to pay sh12m per month with effect from June 2008.
The MP failed to honour the judgment and has not paid a single cent.
He also failed to pay the costs of the suit, and money to the dfcu lawyers amounting to sh3.5m.
It was on these grounds that the legal representatives of dfcu, Ligomarc Associates, asked for a warrant of arrest for Eruaga.
On Wednesday, before he was committed to prison, the MP first agreed to pay sh10m, but later changed his mind and opted for prison.
He pleaded to be given time to sell some of his properties to enable him pay the money.
The bank argues that the MP has shown a non-committal attitude and deliberately failed to honour the consent order. It also claims it has suffered financial loss as a result of the arrears.