Kampala, (UG): Businessman Muhammad Hamid, 47, the owner of Pearl Of Africa Hotel is set to lose it after court bailiffs began the process of auctioning the multi-billion hotel to recover the unpaid shs611 billion debt.
ENSafrica Advocates and M/S MMAKS Advocates, representing the Industrial Development Corporation of South Africa Ltd recently instructed auctioning experts; Armstrong Limited to publish a public notice in Ugandan newspapers 30 days from the expected auction date.
The notice which appeared in the NewVison newspaper on Monday, September 25, 2023, stated that the hotel would be put up for public auction on October 26, 2023, unless the hotel pays the entire outstanding decretal sum (including interest) and our fees and costs before the fall of the hammer at the auction.
“We shall proceed to sell the property below together with all developments thereon by public auction pursuant to a warrant of Attachment and Sale issued by the High Court of Uganda unless the judgment debtor pays to us the entire outstanding decretal sum (including interest) and our fees and costs before the fall of the hammer at the auction,” read in part the public auction notice.
Background of the loan
According to a high court notice issued by deputy registrar Catherine Agwero, businessman Mohammed Hamid popularly known as Aya is accused of defaulting on a loan he acquired from a South African firm; Industrial Development Corporation (IDC) sixteen years ago.
“The application for execution of the judgment creditor in execution…. Is hereby granted and an order of attachment and sale of the following properties at Nakasero Hill Kampala, LRV 3556 Folio 8 plots 7A1-9A1 and 10 Lugard Road, and plots M32, M183, and 2E Nakasero Hill Road Kampala including all the developments is allowed,” Ms Agwero read the ruling last Friday.
Through his company Aya Investments, the loan accumulated over the years to now Shs 611 billion owed to the South African Moneylender, which the auctioneers hope to recoup. The loan emanated from a financing agreement that AYA and the South African organization signed in order to finance the hotel’s construction in 2007.
In court, AYA claimed that the lender had put them in a difficult situation by delaying the money’s availability, which in turn delayed the project’s completion.
Hamid also mentioned disagreements with the Uganda Revenue Authority on the taxes to be paid, but he also acknowledged that it would be difficult to finish the work on schedule, particularly given Uganda’s landlocked status.
Lawyers weigh in
Speaking on condition of anonymity, a lawyer from MMAKS Advocates representing the Industrial Development Corporation of South Africa, said they were reluctant to give a chance to the settlement since Aya Investments had taken over a decade without honouring their outstanding loans.
“The debtor has never made any payments for more than 10 years since he received the money. Therefore, an amicable settlement would not be an option,” the MMAKs lawyer said.
Mr Gibson Munanura, the lawyer representing Aya Investments, when contacted for a comment said he had not yet gotten permission from his client to speak to the media.
“I currently have no directive instructions from my client to make comments on the matter, but as soon as I have, I will revert,” Mr Munanura said.
About Pearl of Africa Hotel
Pearl of Africa Hotel, located on Kampala’s verdant Nakasero Hill at a height of 1240 meters above sea level is one of the five-star hotels in the country offering the best views of Kampala City from every angle.
The 32,000 square meter hotel has 23 stories, 296 rooms, 37 suites, 2 restaurants, 3 bars, 9 meeting rooms, executive lounges on the 15th floor, and a business centre with all the services of a five-star hotel.
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