"The defendant (Drito) defaulted on the payment of subsequent instalments as they fell due."
KAMPALA - Two former Members of Parliament, Martin Andi Drito and Michael Mawanda Maranga, have been dragged to court for failing to clear a loan they had borrowed from Centenary Rural Development Bank.
In a plaint filed on June 21, 2016, at the commercial court, the bank wants to recover sh102.8m and sh50.8m from Drito and Maranga, respectively.
According to the bank, Drito who lost his bid for a re-election as the MP for Madi-Okollo County, Arua, entered into a loan agreement with it on May 4, 2012, and was given sh217.8m.
Under the terms of the loan agreement, the loan was payable in 44 monthly instalments of sh7.3m inclusive of interest at a rate of 1.92% per month.
"The loan advanced to the defendant (Drito) was guaranteed by Parliament who was the defendant's employer at the time of advancement of the salary loan facility which undertook to remit to the plaintiff sh7.3m," reads the plaint.
Through Kalenga, Bwanika, Ssawa and Co. Advocates, the bank alleged that the loan facility was further secured by the former legislator's assignment of terminal benefits with his employer, to it. His life insurance cover was also to be taken in respect of the loan.
However, Housing Finance Bank purportedly bought off the loan without the knowledge and consent of the bank and deposited money on Drito's account who accordingly withdrew everything from the account, unnoticed.
"The defendant (Drito) defaulted on the payment of subsequent instalments as they fell due, leaving a total outstanding balance of sh102, 856, 751," the bank stated.
Maranga, the former Igara East MP, also borrowed sh250m from the bank on October 28, 2011, after entering a loan agreement and agreeing to pay back the loan in 48 monthly instalments of sh7.6m.
The loan advance was guaranteed by parliament and his assignment of terminal benefits with parliament, to the bank. However, he defaulted to pay sh50, 805,490.
"Although the plaintiff (Bank) wrote to the defendant to remind him to honor his undertaking to regularize his loan commitments, all reminders fell on deaf ears and the said loan remains wholly due and owing to date," reads the suit.
The bank said that their several reminders to get the MPs to pay the balance fell on deaf ears, prompting it to recall the loan and give them a seven day notice within which to pay the loan but it was not honored. The bank now wants court to compel the MPs to pay the loan balance.
Meanwhile, the deputy registrar commercial court has given the duo 15 days to file their defence.
When contacted, the MPs denied knowledge of the suit.
Maranga acknowledged that he borrowed the loan but cleared it long time ago.