“I was waiting for Ugandan oil,” Bitature blames $10m debt on Ugandan oil which refused to come out quickly

Ugandan Businessman Patrick Bitature has in another statement to the media blamed the country’s misfortunes in the delays of oil production as partly the reason why his controversial debt with Vintage Mezzanine, a South African based investment Fund came back to bite.

Bitature, who had initially through his lawyer Fred Muwema maintained that he signed for the loan by mistake, now maintains that there was a well-thought process and his Simba Group of Companies approached Vintage for a loan.

He said the money was signed to fund expansion including the completion of Skyz Hotel at Naguru Hill and for “our electromaxx power subsidiary.”

He adds that the agreement has a three-year freeze to repay both the principal and interest.

However, Bitature said their decision for seeking the loan was premised on the prospects of the economic boom in the country, having discovered 65million barrels of oil reserves in the Albertine region.

“Like many other business players in Uganda, we were expecting an economic upturn, and therefore, in line with our innovative plans, groundbreaking and forward visions, we explored opportunities to generate value in the economy through sustainable investments. As one of the leading Ugandan business groups with a credible track record, we were well-positioned to harness this financing opportunity in order to grow and create more jobs and value for the nation.”

He said that with the signing of the agreement in 2014, Vintage was expecting their first payment 3 years later in 2017 but this could not happen because of “unforeseen circumstances” on his part caused specifically by the delay of the Final Investment Decision on the oil and gas projects.

The other reason was that Skyz Hotel was being standardised with fire and safety features to make it internationally acceptable.

Following their inability to service the loan as required, Simba Group then re-engaged Vintage to reschedule the loan repayment for another two years (2019).

Bitature now claims that when 2019 approached, vintage instead issued them a demand notice without factoring in the business challenges owing to the COVID-19 pandemic and delayed business prospects tied to the Ugandan oil production.

“Vintage issued a demand for the principal and interest from 2014 onwards and by early 2020, the said amount had increased with the effects of COVID-19 on the business and the economy,” Bitature said.

Indeed, the country was on lockdown for the most part of 2020 due to the covid pandemic and hotels were hit since they were stopped from operating.

Bitature sought court redress on the matter but the court asked both parties to seek arbitration at a venue chosen by Vintage- London.

“However, notwithstanding the reference to arbitration, Vintage attempted to transfer shares in Simba which they held simply as security,” Bitature laments.

He says that he was rescued by the Uganda Registration Services Bureau (URSB) which decline such a move by Vintage and instead asked that the process of arbitration be finished first.

Vintage dashed to court to compel URSB to release the shares, but the plea was spiked out on May 9^th 2022.

“Despite this ruling, Vintage went on to advertise the Group properties on the 18^th of May 2022 in total disregard to the foundation and concerns raised by the court in its decision,” Bitature states.

Bitature claims that Vintage had issued notice to appeal on the same day they were advertising Simba properties which is “surprising”.

Loan by Mistake?

In 2020 as a way of fighting back, Bitature through his lawyers contacted the Financial Intelligence Authority (FIA) asking them to investigate the source of income by Vintage and under what circumstances they were operating in Uganda.

Bitature’s lawyer Fred Muwema had in a recent interview with the Observer noted that the businessman signed for the loan by mistake.

“The loan agreement was signed in 2014 by other lawyers, but when we came in as new lawyers, we audited the documents and we found that there was a mistake and we raised it...The criminality is in breaking the Ugandan law which says that a foreign partnership must register if it is not using its name. If you don’t register it’s a crime. It is there in the law. You’re supposed to go to jail if you do business as a foreign partnership in those circumstances - without registering. It is an offense...Now you, you commit a crime and you sign an agreement, you come here and do business, you don’t follow the laws of Uganda. The laws of Uganda say you must register, for you you refused and you give money, the laws of Uganda will catch you. Justice Ssekaana used the laws of Uganda, he didn’t dream up that judgement. The judgement, it quotes the law so if you’re having any arguments, you go and argue with parliament which made the law. It was a crime to break the Ugandan law, what more do you have to say.” Muwema said.

Bitature also dragged Vintage to court, arguing that they had no jurisdiction to demand a Ugandan company since they were not legally operational here. High court judge Musa Ssekaana ruled in favour of Bitature.

Vintage responds

In their response, Vintage accused Bitature of using court systems to cheat justice, urging that this was a useless move.

“Vantage will not be deterred by the Simba Group’s and Mr Bitature’s continued abuse of court processes and public institutions, nor by their recent “PR Campaign” in their ongoing efforts to avoid their creditors and lawful obligations, Vantage will persist in the recovery of its long-overdue loan, exercising its rights against the security if need be,” their response reads in part.

Bitature gets court blow

The businessman Bitature also ran to court seeking a temporary against Vantage and its agencies from commencing any private prosecution or legal action until the final disposal of a pending contempt of court case.

However, Justice Stephen Mubiru dismissed the case for lacking “legal basis”

"The applicants' need for such protection must be weighed against the corresponding need of the respondents (Vantage) to be protected against injury resulting from being prevented from exercising their own legal rights for which it may not be adequately compensated in damages if uncertainty were resolved in its favour at the trial. Having done so, I find that the balance of convenience is in favour of the respondents (Vantage). The application catastrophically lacks a legal basis. Consequently, the application is hereby dismissed,” Mubiru ruled.