Johannesburg – Standard Bank Investment Corporation (Stanbic) has been given the go-ahead to sell the 16-floor Uganda Commercial Bank (UCB) building in Kampala after an ownership battle with Ugandan MPs ended up in court.
Stanbic, which bought 80 percent of UCB for $19.5 million two years ago (R120 million at Friday’s exchange rate), last week vowed to fight the lawsuit brought against it by five MPs, who claimed it had no right to sell the property because it belonged to the Ugandan government.
According to Ugandan media reports, the commercial court gave Stanbic permission to proceed with the sale last Friday.
But the court, which denied the MPs a temporary halt to the sale of the building, said they were free to proceed with a main suit on behalf of all Ugandans.
“This is probably the first case of this nature to come to the courts of law,” Judge Geoffrey Kiryabwire was quoted as saying.
Arguing that the building was excluded from the sale to Stanbic in the interests of the public, the MPs claimed the UCB sale was concealed from the public domain.
The matter is set to return to the court on September 15, when the MPs are expected to produce what they argued was the “genuine sale agreement of UCB”.
According to Uganda’s The Monitor, the MPs want a judicial interpretation of terms and conditions of the sale agreement between Bank of Uganda and Stanbic.
They also want a court order directing Stanbic to pay to the government rental proceeds that have accrued from the property since it assumed ownership.
Greg Brackenridge, the deputy chief executive of Stanbic Africa, said last week that it was preparing for a legal showdown.
“We have resolved to bring in our legal team to prove that the building belongs to us as per the agreement we signed with government,” Brackenridge told journalists in Grahamstown.
He said the building was mentioned in the second agreement signed with the government.
According to Brackenridge, the agreement allowed Stanbic to take over the building to cover the asset shortfall of the bank.
Stanbic has continued investing in Uganda. Kampala’s New Vision reported on Monday that Stanbic had invested more than $15 million in the upgrade of its network, which would bring Ugandan banking in line with international standards.