Vantage Mezzanine Fund II Partnership, a South African based capital fund has vowed to recover all the money that Kampala businessman Patrick Bitature owes them.
In a lengthy advertorial published in the Daily Monitor newspaper today, Vantage explained the genesis of the dispute between them and Bitature’s companies operating under Simba Properties Investment Company Limited-SPIC.
Last week, the media published four of Bitature’s properties that would be actioned if he fails to meet his loan obligations.
In 2014, Bitature borrowed $10million from Vantage to boost his real estate business. He was supposed to pay back the loan interest however, according to court filings he reneged on this obligation. Instead, he argued in court that Vantage was not a legal entity to carry out business in Uganda.
The High Court Commercial division under Justice Boniface Wamala ruled that court had no jurisdiction to hear any cases arising from the loan contract adding that parties should go for arbitration as had been spelt out in the loan agreement.
However, earlier this month, another high court judge Musa Ssekaana ruled that Vantage was not legally operating in Uganda therefore, it cannot have any legal right to sue. Using this ruling, Bitature’s lawyer Fred Muwema, told Uganda Radio Network that Vantage has no any claim against his client because it is none existing entity.
Muwema said: “The criminality is in breaking the Ugandan law which says that a foreign partnership must register if it is not using its name. If you don’t register, it is a crime. It is there in the law…Now you commit a crime and you sign an agreement, you come here and do business, you don’t follow the laws of Uganda. The laws of Uganda say you must register, for you, you refused and you give money, the laws of Uganda will catch you. Justice Ssekaana used the laws of Uganda, he didn’t dream up that judgement. The judgement, it quotes the law so if you’re having any arguments, you go and argue with parliament which made the law. It was a crime to break the Ugandan law.”
But in their response, Vantage says Bitature is trying to abuse the court system to defeat justice. But this, they add, will not work.
“Vantage will not be deterred by the Simba Group’s and Mr Bitature’s continued abuse of court processes and public institutions, nor by their recent “PR Campaign” in their ongoing efforts to avoid their creditors and lawful obligations, Vantage will persist in the recovery of its long overdue loan, exercising its rights against the security if need be,” their response reads in part.
Vantage explain in the response that their loan agreement with Bitature despite the court ruling is valid. They explained that when Bitature took the loan in 2014, he had to start paying interest but to date, he has never paid anything. The failure to pay the interest has pushed the total loan to over $34 million.
“In December 2017, the Simba Group defaulted under the Loan Agreement, having taken out significant 3rd party debt without Vantage’s consent, and having failed to service interest under the loan (which was supposed to be serviced quarterly).
SPIC and Mr Bitature launched legal action and obtained interim injunctions against Vantage to avoid/delay the consequences of that default,” the response reads. It adds that instead of moving to enforce the agreement by turning the loan into shares of Bitature’s companies, they opted to restructure the loan and agree a plan on how to pay back by December 2019.
But even this agreement was breeched by Bitature who once again ran to court.
Muwema told us that the terms of the loan agreement were unfair, arbitrary and unconscionable.
“Throughout all the litigation between the parties, the Simba Companies have never contested the existence of our partnership or denied having taken the loan from our fund… an ordinary man in Mr Bitature’s position would no doubt be embarrassed, perhaps ashamed, by this fact….but Mr Bitature appears to be unburdened by such sentiments,” Vantage’s response reads.
In his first reaction since the dispute became public, Bitature acknowledged that he is embroiled in a legal and commercial dispute but he added he is currently handling the matter.
“No doubt these are tough challenges I’m responsible for and are challenges I will face and resolve…social media is not the place to resolve these issues,” Bitature’s statement reads in part.