Bitature, wife, relieved as court withdraws summons in Shs100b loan dispute

Kampala, (UG):- The Buganda Road Chief Magistrates Court has withdrawn criminal summons against Ugandan businessman Patrick Bitature and his wife Carol Nzaro over a $26m (Shs 101 billion) commercial dispute with a South African money lender, Vantage Mezzanine Fund 11 Partnership until investigations into the matter are complete.

The couple were initially required to appear and answer criminal charges in court, but Ms Joan Keko, the Chief State Attorney, on Thursday asked the Buganda Road court presided over by Mr Ronald Kayiizi to vacate the criminal charges pending investigations.

Ms Keko told court that a letter was written to police requesting them to start investigations after the Directorate of Public Prosecutions (DPP) took over the matter, however, documents were later received from the private prosecutor, Mr Robert Kirunda, as per the previous court’s directive.

“The criminal summonses were issued before the DPP took over and, therefore, they collapsed that is why we never applied for the extension of summonses. We pray those criminal summons are vacated until investigations are complete,” Ms Keko submitted.

Mr Kayiizi concurred with the state ruling indicating that “Since the DPP who took over the matter has applied for the vacation of the criminal summonses pending investigations, the criminal summonses are hereby vacated. The case is adjourned to April 3, when the state will update court on the investigations’’.

ALSO READ: DPP takes over $26m legal dispute between Bitatures and South African moneylender

Meanwhile, on February 13, the Court of Appeal ordered Mr Bitature to face trial after the dismissal of his application that had sought for the stay of execution of a ruling and orders of the High Court that directed lower magistrates at Buganda Road to sanction private prosecution charges against him and his wife.  

Justice Hellen Obura, who sat as a single judge, held that the application by the businessman was incompetent before her and was already overtaken by events hence nothing to save. 

“Before I take leave of this matter, I wish to observe that even if I had not found the application incomplete, I would still dismiss it for two reasons. First of all, this application has been overtaken by events as it is clear from the applicant’s supplementary affidavit in support of the application that the order sought to stay has since been executed by the chief magistrate when she sanctioned the charge sheet and any attendant document within five business days from the date of the decision,”  Justice Obura held.

Background

The South Africans zeroed down on fraud charges against the Bitatures based on Section 309 of the Penal Code Act which provides that any person who conspires with another or any fraudulent means to affect the market price of anything publicly sold, or to defraud the public, whether a particular person or to extort from any person commits an offense.

It is alleged that on or about December 11, 2014, at Diamond Trust Building, on Kampala Road, Simba Properties Investment Company, which is owned by Mr Bitature and his wife, borrowed  $10,000,000 (about Shs360b) from Vantage Mezzanine Fund, pursuant to a written mezzanine facility agreement.

The Bitatures in turn, offered their shares in several of their companies such as Linda Properties Ltd, Elgon Terrace Ltd, Simba Properties Investment Company Ltd, and Simba Telecom Ltd, collectively referred to as Simba Companies.

The Bitatures were shareholders in the aforementioned companies directly or indirectly.

It is further alleged that the Bitatures being directors and ultimate shareholders of Simba Companies then, with full knowledge and intent to defraud the South African company and other creditors, altered the shareholding of Simba Companies.

According to the South African Company that is set to be the private prosecutor in this matter, the actions of the businessman and his wife, were in contravention of Section 323 of the Penal Code as they allegedly committed fraud contrary to Section 323, issued false annual returns in respect of the companies contrary to section 309. 

The businessman’s lawyers welcomed the court decision and called the charges “frivolous”. 

Source: Monitor