Court clears Absa Bank to sell Boss Beverages’ property over Shs 710m debt
The High court has cleared Absa Bank to proceed with the sale of mortgaged property belonging to Boss Beverages International Ltd to recover an outstanding loan of Shs 710 million. Court heard that Boss Beverages International Ltd had secured a term loan facility of Shs 400 million from Absa Bank to buy out an existing […] The post Court clears Absa Bank to sell Boss Beverages’ property over Shs 710m debt appeared first on Daily Star.
Black News 
The High court has cleared Absa Bank to proceed with the sale of mortgaged property belonging to Boss Beverages International Ltd to recover an outstanding loan of Shs 710 million.
Court heard that Boss Beverages International Ltd had secured a term loan facility of Shs 400 million from Absa Bank to buy out an existing credit facility from DFCU Bank.
On July 25, 2016, the company paid Shs 201.6 million, along with additional cheques of Shs 16.9 million each, which Absa Bank acknowledged receiving.
Records before court further showed that between September 2015 and May 2016, Boss Beverages International Ltd had paid Shs 168.5 million towards the principal, leaving a balance of Shs 284.1 million. A subsequent payment of Shs 270 million made on July 26, 2016 reduced the balance to Shs 14.1 million.
However, on September 15, 2016, Absa Bank consolidated the existing term loan of Shs 297.7 million with an overdrawn balance of Shs 295.7 million on the company’s account.
In May 2017, the bank issued a demand notice of Shs 151.1 million. This was followed by a notice of default dated August 28, 2017, issued through ENSafrica Advocates, demanding Shs 710 million.
An audit conducted by Izimba & Co. Certified Accountants put the loan balance at Shs 288.2 million and queried Shs 278.7 million, which the auditors said had not been satisfactorily accounted for by the bank.
Absa Bank, however, rejected the audit findings and maintained that the total outstanding amount of Shs 710 million was lawful, comprising both principal and accrued interest after the borrower failed to clear arrears as required.
“The plaintiff has been mistaken on the outstanding loan amount together with interest… arising out of default in repaying the consolidated loan together with interest and penalties,” the bank argued in court.
In her ruling, Justice Ginamia Melody Ngwatu held that the bank acted within its rights under the loan agreement.
“In the premises, I find it appropriate for Absa Bank to exercise its right to sell the mortgaged property. This suit is determined in favour of Absa Bank and is hereby dismissed,” the judge ruled.
The court authorised the bank to recover the Shs 710 million, inclusive of Shs 250 million earlier agreed upon in a partial consent judgment of December 17, 2018, together with interest at 20 percent per annum from the date of filing the suit until full payment.
Boss Beverages International Ltd was also ordered to pay the costs of the suit.
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