Soroti, Uganda: Stanbic Bank Uganda Ltd is under scrutiny following a High Court judgment that questioned the legality of the sale of a mortgaged property in Soroti City, raising fresh concerns about compliance with mortgage procedures and client protection.
The dispute centres on Plot 14, Akakai Lane in Oderai Ward, Soroti City West Division, linked to businessman Abunyang Emmanuel. The property became the subject of Civil Suit No. 28 of 2021, in which Sarah Abuto and Isaac Eriaku challenged what they described as an illegal and fraudulent sale of their guest house.
Court records indicate that the Ministry of Lands, Housing and Urban Development cancelled a land title (LRV 3481, Folio 9) associated with the property after findings of irregular acquisition.
According to proceedings before the High Court, the property was sold in March 2016 for UGX 95 million by Stanbic Bank through its agents, S&L Advocates (formerly Sebalu & Lule). The plaintiffs argued that the sale was conducted without proper valuation, adequate notice, or adherence to mandatory procedures such as public advertisement or auction.
Justice Dr Henry Peter Adonyo, in his ruling, held that failure to conduct a pre-sale valuation renders such a transaction unlawful.
The court found that the sale in question was neither conducted through a public auction nor by private treaty in accordance with the law, raising questions about compliance with Regulation 11 of the Mortgage Regulations, 2021.
Evidence presented in court further showed that a valuation report by Semaganda Associates was commissioned after the sale had already taken place, with correspondence dated April 14, 2016, and the report issued on April 25, 2016.
Earlier valuation records reportedly placed the property’s value at UGX 200 million in November 2015, significantly higher than the eventual sale price.
The bank had maintained in its defence that due process was followed, including the conduct of a public auction. However, court proceedings revealed that the purported bailiff linked to the process was not licensed, and his testimony was later expunged from the record.
In a separate development, Stanbic Bank has since filed a Notice of Appeal and an application seeking a stay of execution of the ruling, naming the plaintiffs, Abunyang Emmanuel, and the Commissioner for Land Registration as respondents.
In an affidavit, the bank’s Head of Litigation and Dispute Resolution, Arnold Atwine, attributed the cancellation of the land title to alleged fraudulent conduct by Abunyang.
Additional claims have emerged from sources close to the matter suggesting discrepancies in the declared purchase price of the property, although these remain unverified and are subject to ongoing legal processes.
The dispute has drawn public attention across the Teso sub-region, with growing debate on the responsibilities of financial institutions in handling mortgaged assets and safeguarding borrowers’ rights.
This is not the first time the bank has faced scrutiny over property sales. In a previous case involving Macdowel Food & Beverages Ltd, court findings raised concerns about the handling of mortgaged assets, although each case is determined on its own facts.
Meanwhile, the property remains at the centre of a separate dispute involving alleged vandalism and theft. Police in Soroti confirmed that a case was reported after items, including doors and fittings, were removed from the premises.
Local authorities, including area leaders, have recorded statements as investigations continue. Police indicated that efforts are underway to trace individuals linked to the incident.
Efforts to obtain a comment from Stanbic Bank Uganda Ltd were unsuccessful by press time.
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