FRAUD ALERT! Stanbic Bank Cited in Alleged Illegal & Fraudulent Sale of Client’s Property

 

Stanbic Bank Uganda Ltd. has come under scrutiny following a High Court judgment that revealed the alleged illegal and fraudulent sale of a client’s property. This case has caused significant concern in the Teso sub-region and has been widely discussed on radio talk shows and social media.

The controversy began after the Ministry of Lands, Housing, and Urban Development, in Civil Suit No. 28 of 2021, canceled the fraudulently acquired land title (LRV 3481, Folio 9) for Plot 14 Akakai Lane in Oderai Ward, Soroti City West Division. This plot belongs to businessman Abunyang Emmanuel, the owner of Strikers bars and lodges in Soroti and Moroto.

The lawsuit was filed by Sarah Abuto and Isaac Eriaku, who challenged the illegal and fraudulent sale of their property and the theft of their guest house’s properties and equipment. The defendants in the case are Stanbic Bank and Abunyang Emmanuel.

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Court documents reveal that Stanbic Bank, together with its agents, S&L Advocates (formerly Sebalu and Lule), sold the plaintiffs’ guest house for UGX 95,000,000, despite failing to conduct a proper valuation, provide adequate notice to the plaintiffs, or follow the proper procedure, including a public auction. Furthermore, no advertisement was made, and the plaintiffs did not give consent for the sale.

Shockingly, court records show that Stanbic Bank’s agents at S&L Advocates pocketed UGX 12,710,000 as commission and for an advertisement that was never published and a public auction that never took place.

This sale violated Regulation 11(1) and (2) of the Mortgage Regulations, S.I. No. 2 of 2021, which mandates that before selling any mortgaged property, the mortgagee must assess its current market value and forced sale value.

In the judgment, Justice Dr. Henry Peter Adonyo ruled that any sale conducted without a pre-sale valuation is illegal and fraudulent. He further concluded that the sale of the plaintiffs’ property by Stanbic Bank and their agents was neither conducted through a public auction nor by private treaty.

According to a sale agreement seen by this publication, the plaintiffs’ property was sold on 24th March 2016, with the bank writing to Semaganda Associates on 14th April 2016 to conduct a valuation of the plaintiffs’ property. A valuation report was prepared on 25th April 2016, long after the sale had already taken place.

Evidence in court records shows that the property was originally valued on 18th November 2015 by CMT Realtors at UGX 200,000,000. However, Stanbic Bank and their agents later instructed Semaganda Associates to undervalue the property to match the sale price of UGX 95,000,000 after the sale to Abunyang.

Stanbic Bank, as evidenced in the sale agreement and court proceedings, argued that a public auction had been conducted. However, Turyagenda Elly, the purported bailiff, went into hiding after M/S Omongole & Co. Advocates presented evidence from the Chief Registrar, confirming that Turyagenda was not a licensed bailiff. His witness statement was expunged from the court record after he refused to testify.

In a classic case of fraud, Stanbic Bank’s legal officer, Mutahunga Norris, attempted to deny the contents of their own sale agreement during cross-examination by Omongole Richard, the plaintiffs’ attorney. The court ruled that a party who benefits from a deed cannot reject or deny its contents. As such, Stanbic Bank was estopped from alleging that the sale of the mortgaged property on 24th March was an error.

In a dramatic turn of events, Stanbic Bank has filed a Notice of Appeal and Misc. Application No. 147 of 2024 for a stay of execution against Sarah Abuto, Isaac Eriaku, Abunyang Emmanuel, and the Commissioner for Land Registration.

In an affidavit in support of the application, Arnold Atwine, Stanbic Bank’s head of Litigation and Dispute Resolution, claims that the cancellation of the land title was due to Abunyang’s fraudulent conduct.

This scandal has another twist. A lawyer associated with Abunyang, who spoke to us anonymously for purposes of this story, revealed that Abunyang had confided in him that he paid UGX 280,000,000 for the property in question. However, bank officials and their agents asked him to acknowledge a purchase price of UGX 95,000,000.

The same lawyer claims this is why the bank instructed Semaganda Associates to conduct a valuation long after the sale had taken place, on 14th April 2016.

To support this narrative, we have obtained a letter dated 25th September 2024, written by Alliance Advocates to Stanbic Bank. The letter claims that they had valued the property on 4th August 2022, estimating its value at UGX 540,000,000. The increase in property value is attributed, among other factors, to improvements allegedly made by Abunyang.

This is seen as an attempt by Stanbic Bank officials and their agents to help Abunyang recover a kickback of UGX 185,000,000, allegedly paid to them, by falsely claiming that Abunyang made improvements to the property.

This is not the first time Stanbic Bank and its agents have been accused of colluding to sell mortgaged property at an undervalue. In the case of Macdowel Food & Beverages Ltd vs. Stanbic Bank Uganda Ltd (Misc. Cause No. 568 of 2020), senior bank employees were found to have illegally sold a client’s property to themselves. Although the court awarded UGX 400,000,000 in damages to the victim, the fate of the bank officials involved remains unclear, and they may still be targeting new victims.

 

We will continue to monitor this case to ensure that the corrupt individuals in the banking sector who exploit hardworking Ugandans are exposed and held accountable.

 

More Trouble for Abunyang as He Faces Eviction from the Property

While the plaintiffs were taking legal steps to evict Abunyang from the property, their lawyers at M/S Omongole & Co. Advocates received a letter on 28th October 2024 from Abunyang’s lawyers at Alliance Advocates. The letter claimed that Abunyang had complied with the Registrar of Titles’ demand and handed over the title for cancellation. Abunyang requested a peaceful handover of the property by 1st November 2024 to avoid further complications.

However, on 29th October 2024, the plaintiffs learned that Abunyang was vandalizing the property. They reported the matter to the Resident City Commissioner (RCC), Mr. Peter Pex Paak, who attempted to mediate but was unable to reach Abunyang. Acting on the RCC’s advice, the plaintiffs and the police went to the premises and found that Abunyang had fled after vandalizing the property. He had stolen 11 internal doors with their locks, removed six locks from other doors, and taken a water heater, leaving behind a water bill estimated at UGX 500,000.

When we visited the Soroti City Western Divisional Police Station to confirm the facts, an officer, who requested anonymity, confirmed that a case of vandalism and theft had been filed against Abunyang. Despite being served with summons, Abunyang, a former Umeme employee whose contract was abruptly terminated, remains in hiding. “We have no option but to arrest him,” the officer stated.

We also spoke with Mr. Echobu David, the Local Council 1 Vice Chairperson, who confirmed that he visited the premises with the police on 30th October 2024 and recorded a statement.

When we reached out to Zeere James of S&L Advocates, who had been at the property expecting to witness the handover, he stated that the matter of vandalism and theft was Abunyang’s responsibility, not Stanbic Bank’s.

M/S Omongole & Co. Advocates confirmed that they had written to Abunyang and Stanbic Bank on 17th January 2025, demanding that they address these malicious and criminal acts within 21 days, or face legal action.