The owner of land on which Riham Cola plant in Kawempe sits has complained to dfcu Bank claiming Crane Bank connived with Riham todefraud him of this land.
In a letter dated March 1, 2017 to the Managing Director dfcu which took over Crane Bank, Mr, Navinchandra Kakubhai Radia who is the managing director United Builders and Contractors Ltd accuses Crane Bank of helping the owners of Hariss International and Biplous Uganda Ltd to use fake loans to evade paying his USD240,000 over Shs861m balance for this land and now want the company evicted.
“On October 18, 2004, judgment was given in favor of United Builders and Contractors wherein Riham Biscuits Industries (U) Ltd was ordered to pay the balance of USD240,000 or alternatively return plot 83 Kawempe. It was obvious to Riham Biscuits (U) Ltd that they could not win the case and had to pay as ordered by the judgment or return plot 83 to United Builders and Construction and that is when Crane Bank comes in. Crane Bank appointed a receiver the late Paul Kiapi and placed Riham Biscuits Industries Ltd in receivership on November 5, 2004, 17 days after the judgment,” part of the letter reads.
The letter notifies the bank among other things that it has been co-sued in a civil suit at Commercial Court for Crane bank fraud and the likely loss it is to suffer if the suit succeeds.
How Forgery Occurred
Navinchandra states that though his United Builders and Construction Company, he sold this land to two Lebanese Nationals Abdul Azzik Dakik and Ezzat Kassem Ahmed at USD300,000 on September 5, 1995.
The two Labanese nationals were at that time directors and joint shareholders in Riham Biscuits Industries Ltd. He says they paid him USD60,000 and remained with the balance of 240,000 which they promised to clear by October 31, 1995.
“The purchasers aforementioned defaulted to pay the balance within the stipulated time and requested United Builder company for some more time to pay the balance with an interest of USD4400 (over 15.7m) in liu of default,” Navinchandra states.
The letter explains that in purported payment of the balance (USD240,000) plus the USD4,4000 interest, the Riham directors used their business partner Ali Kassem Ahmed to issue United Builders and Construction a cheque and immediately demanded that the land transfer forms be signed in favor of Riham Biscuits Industries. The then Managing Director United Builders and Construction Bipin Patel, having been handed the cheques signed the transfer forms in favor of Riham Biscuits which is owned by the two Labannese nationals; Abdul Azzik Dakik and Ezzat Kassem Ahmed.
Navinchandra says that immediately Riham Biscuits took possession of this Kawempe land, it used it as security to borrow USD425,000 (over Shs1.5bn as per current exchange rate) and borrowed another Shs100m using the same property. He adds when Patel deposited the cheque, it bounced because the Labanese had no money on their accounts.
“Upon bouncing of the cheque, United Builders realized that they had been cheated by Riham Biscuits Industries (U) Ltd and its directors so we filed Civil Suit No. 203 of 1998 in the High Court against Riham Biscuits Ltd seeking the balance of USD240,000 or return of our land plot 83 Kawempe which Riham Biscuits and its directors had not fullypaid for,” he says.
Navinchandra further reveals that during the process of Crane Bank lending Riham Biscuits Industries Ltd, another company Biplous acted as a guarantor for the USD425,000 yet the owners of this Biplous company are the same two Labanese nationals; Abdul Azzik Dakik and Ezzat Kassem Ahmed. And that after Riham Biscuits Industries failed to pay, Crane Bank put it in receivership under Kiapi who also appointed a lawyer Peter Paul Katutsi on January 12, 2005.
He adds that about two Months later another company Harris International Ltd was incorporated on March 4, 2005 with its constitution witnessed byPeter Paul Katutsi who was the lawyer for the receiver.
Subsequently, the Receiver Kiapi transferred the assets of Riham Biscuits Industries Ltd to the newly incorporated Hariss International Ltd. The Initial shareholders of Hariss International were Chad kassem Ahmed and Mohmoud Al Ashkar who later went on to transfer their shares to the former directors of Riham Biscuits Industries (U) Ltd Abdul Azzik Dakik and Ezzat Kassem Ahmed,” Navinchandra states. He explains that immediately Hariss International was incorporated Crane Bank lent it another Shs100m.
Accordingly, Abdul Azzik Dakik and Ezzat Kassem Ahmed later converted the land title to Freehold and registered it in the names of their company Biplous yet under the land Act non-Ugandans or companies owned by foreigners are not supposed to own a free land.
“In light ofthe above, Crane Bank secured the loans because it was dealing with the same individuals (some kind of insider dealing) but different companies who have the same directors. Hariss International (U) Ltd is also the manufacturer of Riham products like sodas, biscuits which are on market to-date having acquired the trade mark of Riham Biscuits Industries (U) Ltd,” Navinchandra notes.
He says that because Riham Biscuits Industries Ltd remains under receivership of Crane Bank, Navinchandra and his United Builders and Contractors is left with a judgment decree which it cannot enforce against “a valueless shell of a company (Riham Biscuits)” in Receivership which was perpetrated by Crane Bank.