By Mulengera Reporters
In 2014, Kampala property mogul/businessman Kennedy Losuk Lokule embarked on construction of the luxurious Emin Pasha Lake View Residence on the rocky terrain of Kampala’s upscale neighbourhood of Muyenga.
Reporting by Weekend Vision shows that the 120-room accommodation facility was a huge undertaking which Lokule could only accomplish using borrowed funds. That’s how he ended up with a Shs150bn loan from Equity Bank Uganda. The private developer also had the option of bringing in and partnering with Radisson Blu executives who would help in the building and subsequently managing the resultant Radisson Hotel for some time.
As of 2019, Equity Bank had already become the major financier of the Muyenga project. They initially injected Shs16.5Bn (as of December 2019), some of which was expended on repaying an earlier loan facility the Emin Pasha company had taken from Exim Bank.
Barely 6 months later, the whole country was in disarray and its economy locked down because of Covid. This unforeseen lockdown complicated the borrower’s capacity to make regular loan repayments.
Yet along the way, the borrower also got into other additional costs relating to Liba Management which Equity Bank, the lender, recommended to help to ensure the 120-rooms Muyenga property was constructed in compliance with certain minimum standards.
At some point, the borrower indicated need for more funding, a request Equity Bank couldn’t promptly entertain because there was need for wide consultations with and approval from their parent headquarters in Nairobi Kenya. It was indicated that how fast the approval comes would depend on when the Covid lockdown was relaxed.
The other cause of complication in loan repayment was the fact that Emin Pasha Hotel’s sister company, Prism Construction Ltd, got into problems with its Bushenyi-based Technical College construction works project.
They had done the work but the Ministry of Education was unable to promptly pay them up to Shs8.4bn. Had this been paid as early as September 2021, when payment became due, there is no way the borrower would have failed to discharge its Equity Bank-based loan repayment obligations.
The other cause of complication in loan repayment was the fact that Emin Pasha Hotel’s sister company, Prism Construction Ltd, got into problems with its Bushenyi-based Technical College construction works project. They had done the work but the Ministry of Education was unable to promptly pay them up to Shs8.4bn.
Had this been paid as early as September 2021 when payment became due, there is no way the borrower would have failed to discharge its Equity Bank-based loan obligations.
Later on when things real soured, the MoES terminated the Bushenyi contract over Prism’s failure to promptly progress and this resulted into the GoU falling back on the performance guarantee, which Equity Bank was called upon to help on to the tune of Shs2.46Bn.
This was advanced in favour of Prism at the interest rate of 24% per annum and the total loan has now accumulated to Shs5.3bn, counting from August 2021.
Equity Bank has since run out of patience since this is savers’ money, and not the Banker’s. Last week the bank escalated the foreclosure processes by advertising some of the borrower’s property, including the Emin Pasha Hotel of Nakasero.
Not prepared to go down without a fight, tycoon Kennedy Losuk Lokule has written to the President of Uganda calling for help. In his written request, Lokule has asked the President to intervene and prevent Equity Bank from auctioning his property so as to buy time to work towards ensuring that the MoES pays up for the work that was done on the Bushenyi-based Technical College facilities’ construction.
President Museveni has since written to and directed Attorney General Kiwanuka Kiryowa to cause Equity Bank-instigated auction of Emin Pasha hotel to be halted to allow for time to verify Prism’s claim against the MoES over the Bushenyi project.
Businessman Odrek Rwabwogo, who marries one of the President’s daughters, has also separately weighed in in writing demanding that Equity Bank suspends all foreclosure processes targeting any of Mr. Kennedy Losuk Lokule’s properties.
Finance Minister Matia Kasaija has also equally weighed in, at the instigation of the President, assuring Equity Bank that their outstanding loan will be paid at some point provided that the businessman is allowed more reasonable time to have his claim against the MoES verified, harmonized and paid off to enable him pay.
On its part, Equity Bank has officially opted not to discuss much about the matter to avoid breaching bank-client confidentiality requirements.
The matter is equally in Court, which had authorized the auctioning of Emin Pasha Hotel in Nakasero to enable the recovery of the sums owed. Fear to breach the subjudice rule is another probable reason why the Equity Bank management has remained uncomfortable publicly commenting on the Lokule loan dispute. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
