Businessman Haruna Sentongo, brother to billionaire Hamis Kiggundu, has been ordered by Uganda’s Court of Appeal to repay UGX 10.38 billion to I&M Bank Uganda (formerly Orient Bank) or risk losing his mortgaged properties.
The ruling, which upholds an earlier High Court decision, highlights the legal and financial consequences of loan defaults in Uganda’s business sector.
Loan Default and Legal Dispute
Sentongo obtained credit facilities from I&M Bank to fund real estate projects, including Nakayiza Mall and Segawa Market.
However, he defaulted on repayments, leading to a legal battle that began in 2019. The bank sought UGX 10.4 billion in outstanding loans, interest, and penalties, while Sentongo countered with claims of fraud, excessive charges, and breach of contract.
After reviewing financial records and testimonies, both the High Court and the Court of Appeal ruled in favor of the bank, affirming that Sentongo had received the disbursed funds and was obligated to repay them under the agreed terms.
Property at Risk
As part of the loan agreements, Sentongo mortgaged prime properties in Kibuga Block 12, Mengo (Plots 250, 251, and 252).
With the court ruling in favor of I&M Bank, the institution has been granted the right to sell the collateral if Sentongo fails to clear the debt.
Key Court Rulings
- Debt Confirmation: Sentongo must repay UGX 10,384,396,959.
- General Damages: UGX 150 million awarded to I&M Bank.
- Interest Rate: 22% per annum on the outstanding sum until full repayment.
- Property Seizure: Bank authorized to sell mortgaged assets.
Business and Banking Implications
The ruling reinforces the enforceability of financial contracts, urging businesses to meet their loan obligations to avoid legal and financial repercussions.
It also underscores the need for transparency in banking transactions and the role of courts in ensuring fair financial dealings.
