OVERKILL! M7 to the rescue as Stanbic Bank moves to ‘kill’ Mogas tycoon Rugazoora
Mogas tycoon Rugazoora (inset)
When Covid-19 pandemic set in, many Ugandans thought it was a wind passing, but reality soon set in and many businesses now remain at the mercy of lenders, or financial institutions who advanced them loans. While these businesses continue operating in deficits while others shut down completely, these financial institutions continue operating and thriving. Banks are now busy harassing Ugandans by attaching their properties, yet the same people haven’t been working for almost two years. In short, they want to sell the whole country. Among the properties that have been put on sale include schools, private properties, farms, commercial buildings and residential houses among others. Instead of helping them recover, banks are now making matters worse by crushing debt-laden businesses that were critically dependent on rollover financing by dragging them into insolvency or receivership.
MOGAS TYCOON NOT SPARED
Among those on the verge is MOGAS Group tycoon, Geoffrey Rugazoora. His company was last year put in receivership by Stanbic bank Uganda which is seeking to recover monies he owes them. On top of that his home along Solent Avenue (Plot 24) in Mbuya, Kampala has also been advertised for sale by auctioneers. Another house in Rubaga, Kampala (Plot 573 Kyadondo block 160) has been advertised. Another advertised property is located on Plot 6, Singo Block 553 Bukomero. His days to rescue them are numbered. It is well known that debt has long been a problem for many Ugandans, but the Covid-19 pandemic spread the misery to tens of millions more including the likes of Rugazoora.
Now observers have told this publication that the emotional strain of dealing with debt can be almost as damaging as seeing your house being sold to someone else. Observers now say that this kind of pressure is enough to trigger a number of health complications to Rugazoora who is already in his 70’s and may even lead to death. “Whatever the cost, whatever the cause, debt wreaks emotional havoc on our psyche.
Among the negative effects are low self-esteem and impaired cognitive functioning. That means you can’t learn, remember, be attentive or solve problems as well when you’re freaking out over a loan. And get this – debt can hurt. I mean, really hurt. It can even cause death,” one of the observers said.
MOGAS FATE
Stanbic Bank Uganda demands Mogas about shs43bn. The first option is an impending deal between Mogas and Ola Energy Ltd. In January, the High Court judge, Justice Jeanne Rwakakooko, granted a temporary injunction of six months to Mogas to allow the company complete its negotiation with Ola Energy Ltd which was willing to take over Mogas and pay off a debt. The second option is for Mogas bosses to allow Stanbic run the show. By selling whatever is available to recover their monies. The third option is the one being proposed by President Museveni. The President in a September 5 letter issued a directive to PM Robinnah Nabbanja to work out a bailout for Mogas. Government agencies are to buy 15 acres of prime land in Mukono at the prevailing market rates.
“There is a Ugandan family, the Rugazooras, that are quite active in businesses, including owning petrol stations in Uganda, Tanzania, Burundi, Congo etc. They have some debts that they could not promptly settle because of the Corona pandemic.
However, they have prime land of 15 acres in Mukono near the railway. If the government bought that land, they would get the money that could help them to reschedule their debts into manageable installments that they would be able to pay over a period of seven years,” part of the letter reads.
“Let, therefore, the appropriate agency of the government buy that land at the prevailing market price. Should it be the Ministry of Finance, Planning and Economic Development or Works, which one to buy? Involve the attorney general to advise you. Move fast so that the debt does not escalate,” the letter concludes.
Experts are however advising the government to come up with action plans to help Ugandans who have been economically bruised by Covid-19 related disruptions. These have not been working for almost two years. They were told to stay home, wash hands and mask up, but no money. At the same time loans sharks are menacingly attaching their property including saucepans. They are also asking the government to reign on banks which continue to demand loan repayments menacingly yet they have not been working. Pundits opine that it is a grave mistake for the government to allow financial institutions to continue operating in that manner. The bank takeover will automatically ‘kill’ the dreams of Rugazoora, who was excited for Uganda’s upcoming upstream and pipeline developments and the latest on its activity in the country. (UGANDAN BANKS: WHAT YOU DIDN’T KNOW? HAVE YOU EVER BEEN TREATED UNFAIRLY BY ANY OF UGANDA’S COMMERCIAL BANKS? TELL US YOUR STORY: CALL / TEXT/ WHATSAPP 0777959024. YOU CAN ALSO SEND IT TO redpeppertips@gmail.com.)
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