November 20, 2023
KAMPALA, Uganda | The Commercial Court has directed businessman Patrick Bitature to refrain from altering the shareholding structure of four of his companies amidst an ongoing loan dispute with South African financiers from Vantage Mezzanine Fund II Partnership and Vantage Mezzanine Fund II Proprietary Limited. Justice Thomas Ocaya held that allowing Bitature to change the shareholding of Simba Properties Investment Co. Ltd, Simba Telecom Ltd, Elgon Terrace Hotel Ltd, and Linda Properties Ltd could potentially jeopardize the enforceability of a future court ruling on the matter.
Vantage Mezzanine Fund II Partnership and Vantage Mezzanine Fund II Proprietary Limited filed a lawsuit against Bitature and the four companies, along with Bitature’s wife Carol Bitature, Uganda Registration Services Bureau (URSB), and the Commissioner of Land Registration. The legal dispute stems from Bitature’s failure to repay a $10 million loan obtained from Vantage within the agreed timeframe, resulting in accumulated interest. Bitature contested Vantage’s legal standing in Uganda, arguing that the entity was not legally operating in the country.
Various legal proceedings, including arbitration, have consistently found Bitature liable for the outstanding debt. Despite his attempts to halt the enforcement of the arbitral award, the court affirmed that Bitature mortgaged the contested properties to secure the $10 million loan.
The recent court ruling revealed Bitature’s attempt to change the shareholding structure of the companies involved, a move perceived as an effort to alter the landscape before a final decision is issued. The judgment noted specific board resolutions filed by Elgon Terrace Hotel and Linda Properties, assigning shares to various entities. The court found these actions dated August and September 2023, indicating a potential shift in ownership.
The court dismissed arguments by the Uganda Registration Services Bureau and the Commissioner of Land Registration that restraining them from registering new transactions on Bitature’s properties would impede their constitutional duties. The ruling highlighted the real likelihood of entries being canceled and steps being taken to frustrate the enforcement of the award.
