Absa Bank Cleared to Sale Boss Beverages Properties Over Shs710 Million Debt

Absa Bank Uganda has won a significant legal battle, receiving court approval to sell properties owned by Boss Beverages International Limited to settle an outstanding debt of Shs710.2 million. The High Court's Commercial Division dismissed a protracted loan dispute, rejecting Boss Beverages' claims of wrongful interest calculations and ordering the company to cover legal costs.

The ruling brings an end to an eight-year legal entanglement that originated in 2018. Boss Beverages had sued the bank, then known as Barclays Bank Uganda, alleging that it had been charged unlawful interest rates and penalties on loans. The company argued that it had largely repaid a Shs400 million term loan from 2015, used to refinance an earlier DFCU Bank facility, and contested the bank's assertion that the debt had ballooned to over Shs710 million.

Boss Beverages presented an audit report from Izimba & Co. Certified Public Accountants, which estimated the debt at approximately Shs288 million and questioned the bank's accounting. However, the bank maintained that Boss Beverages had defaulted on both the Shs400 million term loan and a separate short-term facility, which were later consolidated at the borrower's request. The bank contended that continued defaults led to the accumulation of contractual interest and penalties, pushing the debt to Shs710.2 million by August 2017.

During the proceedings, company representative David Kyeera testified, challenging the bank's figures. However, under cross-examination, he admitted to lacking formal accounting qualifications. Acting Judge Dr. Ginamia Melody Ngwatu found Kyeera competent to testify as an employee familiar with the company's transactions but noted weaknesses in his analysis, particularly his failure to account for interest and default penalties. The court also observed that Boss Beverages failed to submit written arguments within the given timelines without providing a satisfactory explanation.

The court has authorized the bank to recover the debt through the sale of mortgaged properties located on Block 232, Plots 2619 and 2406 in Banda-Kireka. The outstanding amount will continue to accrue interest at 20 percent per annum until fully paid.

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The defendant shall proceed with the sale of the mortgaged property according to the law to recover the outstanding sum of UGX 710,176,404 and interest accrued at 20% from the date of filing this suit until payment in full.