The money in question was a bailout to basajjabalaba after facing financial hitches on the international market in 2007. Subsequently, government through Bank of Uganda, entered into a consent judgment with Basajabalaba Hides & Skins before loaning it UGX 24 billion.
The orders were made by High Court, Land Division Judge Wilson Kwesiga arguing that the land titles were being held illegally.
The matter arose in 2007 when Basajjabalaba Hides & Skins, a company owned by Hassan Basajjabalaba, sought for financial bail-out of about UGX 24 billion from the government.
The money in question was a bailout to basajjabalaba after facing financial hitches on the international market in 2007.
Subsequently, government through Bank of Uganda, entered into a consent judgment with Basajjabalaba Hides & Skins before loaning it UGX 24 billion. The loan was discharged through Stanbic and Standard Chartered Banks.
The titles had been deposited with the central bank after the government saved Basajjabalaba’s assets when he failed to pay Standard Chartered and Stanbic bank loans. The Standard Chartered Bank loan amounted to $16m while the Stanbic bank loan was $8m.
The understanding was that BoU would deposit the money with the two banks which it would recover once another commercial bank bought out Basajjabalaba’s debt.
However, after the bail-out, Basajjabala irregularly procured fresh titles to properties whose genuine titles had earlier been mortgaged to BoU as security for a multi-million dollar loan.
Using the new titles, Basajjabalaba quickly sold off the properties to his cronies in an attempt to conceal their ownership, according to court documents.
On realising this, the central bank went to the courts to quash the consent decree upon which the new titles were issued and re-establish its right over the properties mortgaged to it.
The central bank argued that Basajjabalaba used a fake court order dated June 25, 2008 to acquire new titles to the properties and selling them rapidly, leaving BoU holding on to the genuine titles.
But the court in its ruling; held that the money borrowed by Basajjabalaba Hides & Skins from government, had been remitted back, hence no need for further withholding of the same.
“It’s my finding that the 1st respondent (Bank of Uganda) held the listed certificates of titles on account of the consent judgment that obliged the applicant (Basajjabalaba Hides & Skins) to pay the decrental sums which the applicant has proved to have paid in full to the satisfaction of the consent judgment,” ruled Judge Kwesiga
In his judgment, the judge also ordered Bank of Uganda to release all the encumbrances on the returned securities whether as caveats or mortgages.
Court further ordered Bank of Uganda to meet all the legal costs that Basajjabalaba Hides & Skins used in this matter. Also sued was the office of the Commissioner of Land Registration.
The land titles that were in possession of Bank of Uganda are for prime plots located in Munyonyo, Namirembe Road, on Nkurumah Road, Hunter Avenue, and on Kyadondo Road in Mbogo Kabalagala, all in Kampala.