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Client sues Crane Bank over property
Crane Bank premises on Kampala Road. FILE PHOTO
Kampala- Crane Bank Limited is embroiled in a Shs6 billion property row with its client over the impending sale of mortgaged properties.
The property under controversy registered in the names of Miao Hua Xian is on Plot 47 Nabugabo Road worth Shs2 billion and Plot 53 Mackenzie Vale, Kololo worth Shs3.9 billion, both in Kampala District.
Ms Xian has sued Crane Bank alleging that the credit sanctions and mortgages extended to her were in contravention of the laws and not enforceable.
Through her lawyers Muwema and Company Advocates, Ms Xian wants a declaration that the penal interest charged by the bank under the credit facilities is extortionate, unconscionable and illegal.
In a case before the Commercial Court, Ms Xian wants court to declare that a notice of intended sale of her properties by Fit Auctioneers and Court Bailiffs is null and unenforceable.
Ms Xian’s woes arose from a July 2013 credit facility of Shs1.5b and $800,000 she acquired at an interest rate of 12 per cent per annum for the dollars and 24 per cent for the Shillings loans.
It is alleged that the two facilities were secured by the mortgage of the complainant, consisting of the two properties.
Court documents indicate that the penal rate for both credit facilities was stated to be 36 per cent, representing a 200 per cent and 50 per cent increase in the interest rate for the dollar and Shilling credit facilities, respectively.
It is alleged that in July 2014, Ms Xian experienced difficulty in prompt servicing of the loan which led her to sanction a separate temporary overdraft of Shs700m to enable her pay the amount outstanding against the earlier two facilities.
Court documents also show that in August this year, Ms Xian requested to make substantial payments worth Shs3.65b against release of one of the land titles for the property on Nabugabo Road to Orient Bank Limited as a new financier but that Crane Bank refused to accede insisting on full payment of the outstanding liability leading to advertising the property for sale.
However, Crane Bank denies the allegations saying the businesswoman defaulted in settling the facilities in accordance with the terms on which they were granted.
“The plaintiff did not settle the monies owed whether in part or whole within the time indicated in the notice on default the bank thereby issuing a notice of sale,” reads a defence statement.
Through its lawyers, the bank alleges that Ms Xian is currently indebted to the bank for $1,135,389.94 and Shs2,626,871,564 which also continue to attract interest at the contractual rate.
