Crested Towers that houses the Stanbic Bank head offices in Uganda. Court has condemned Stanbic Bank to pay more than Shs400m to Macdowel Food and Beverages. PHOTO/ NET
By Anthony Wesaka
The Commercial Court has condemned Stanbic Bank to pay more than Shs400m after some of its top staff created a sham company that they used to sell to themselves several plots of land belonging to a customer.
Justice Richard Wejuli Wabwire, in his ruling on Friday, said he could not turn a blind eye when employees of Stanbic Bank circumvented the law to the disadvantage of their esteemed customers.
The disadvantaged customer is Macdowel Food and Beverages. The customer will receive more than Shs400m in general and punitive damages.
The bank employees, who incorporated a sham company called Myriad Investment Club, are Lawrence Kaweesa, Allan Muhinda, Daisy Nitwe, Emmanuel Rukeeba, Kenneth Kitungulu, Maureen Kembabazi Katwebaze and Thaib Lubega.
“It is very clear from the evidence on record contained in the affidavits in support of this application and rejoinder that the shareholders of the 2nd respondent (Myriad Investment Club)…..are employees of the 1st respondent (Stanbic Bank) on February 3, 2020, opportunistically incorporated a sham or conduit company in the name of 2nd respondent (Myriad), with a hidden motive of purchasing the securities, of the applicant (Macdowel),” Justice Wejuli ruled.
He continued: “It is my finding that the 2nd respondent (Myriad) which was incorporated after an advert for auction of the applicant’s securities is a creature of the employees of the 1st respondent (Stanbic Bank) as a devise by a sham, a mask which the employees of the 1st respondent who are also directors and shareholders of the 2nd respondent, chose to shamelessly place upon their faces in an attempt to circumvent the provisions of Section 30 of the Mortgage Act 2009. It would create an absurdity if this court allowed the respondents to walk away scot free.”
This matter arose in March 2019 when Macdowel Foods and Beverages sued Stanbic Bank and Myriad Investment following a loan gone bad.
On April 4, 2019, Stanbic Bank filed a defense, challenging the claims raised by Macdowel as being an abuse of the court process.
But on August 20, 2019, Macdowel and Stanbic Bank agreed to amicably settle the loan dispute by entering into a consent judgment.
In the consent judgment, it was agreed that Macdowel pays over Shs1b to Stanbic Bank in a monthly instalment of Shs30m.
It was also agreed that should Macdowel default to make any instalment in whole or part to clear its loan, Stanbic would proceed to advertise and sale it’s securities of four plots located at Works Close in Luzira.
In February 2020, based on the terms of the consent judgment, the bank went on to sell Macdowel’s securities to Myriad Investment, that came as the highest bidder.
Myriad Investment was incorporated by the aforementioned top Stanbic staff barely a month after the advert for sale of the securities and sold to themselves Macdowel’s plots, a move that Macdowel later challenged before court as being illegal, with court agreeing with them.
Source Daily Monitor.