Praful Patel in paragraph 2 of his statement because the directors powers ceased immediately upon appointment of the liquidator and further doing so would amount to fettering the exercise of my powers. It is also not true that before selling the assets I had to first consult with my principal, the company, because my mandate to sell was given at the time of my appointment. Further i am not aware of the Ushs. 22.3 billion ascertained by the purported reputable valuer, as alleged in paragraph 15 of pw 1s statement, in any case the price in respect of sales under winding up does not have to be determined by such valuation but by the market forces of demand. Further I was never made aware of any visit by the 2nd Defendants officials to the 2nd Plaintiff and their offer of usd.5 million and the subsequent rejection of the same as alleged by pw 1 in paragraph 16 of his statement. It is not true as alleged by pw 2 that I had details regarding money that was supposed to come on account of a consent judgment between Afric co-operative society and the Attorney general.
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Kalan, the md had rejected his proposal and instead referred him. I accordingly told him that it was not within my powers therefore to halt the sale. It is not true as alleged by pw 4 in paragraph 6 of his statement that when they called me again I had switched off my phone. (Rtd) Salim Saleh called me on the same day and asked me why i was selling the assets alleging that he knew what I was doing with the bank. He did not mention anything to do with Citibank or any effort to secure money to save namesake the assets. I was never notified about the generals request to citibank to save the assets and i only got to know about his letter when I was supposed with the Plaint in this suit. The cheque was however cleared on the 4th day of September 2007 whereupon the sale agreement was executed. From the time of the letters from Global diaspora Advisory council and Agro Group of Industries Limited to the time of the sale no money was ever paid as per their undertaking and neither did they assign any reason for such failure. In the circumstances I did the best I could and with all diligence to ensure that the assets of the company were sold at the best price available. I accordingly saved the guarantors and their property and also managed to pay off the cooperative bank which was within my mandate as a liquidator. It is not true that I was supposed to pay off such debts in consultation with the directors as alleged.
I accordingly contacted. Thakore patel, one of the write guarantors and notified him of the situation whereupon he introduced me. Amirali karmali, a director in the 2nd Defendant who offered a maximum of usd 1,200,000/ (United States dollars one million two hundred thousand) for Plot 78-86 Palisa road. The offer was the best in the circumstances and therefore i had no alternative but to accept the same since it was sufficient to offset the entire outstanding to the bank which would also save the guarantors and their properties. I accordingly received a cheque of the said amount which I deposited with the bank. Soon thereafter I received a called from pw 4, captain Juma seiko.00. As I was about to enter a lecture room at the law development Centre to teach informing me that he was interested in saving the company and that I should not sell its assets. I told him to contact the bank and convince them to withdraw the assets from sale but he told me that.
A similar letter was addressed to all the guarantors including the 2nd Defendant but still there was no repayment and the lawyers did not take immediate action. It was not until the 3rd day of August 2007 that M/s Frobisha b- ijambere, bailiffs auctioneers were instructed to realise the securities. The auctioneers wrote to me a demand letter notifying me of the advertisement of the property in the monitor newspaper of the same day wherein they indicated that the advertised properties were to be sold after 30 days. All the guarantors were notified about the intended sale but still no repayment was made whereupon I decided to find out from the said auctioneers whether they had received any bids for the properties. Musa Ibanda told me that he had received only two bids for the Plot 78-86 Palisa guaranteed road, Mbale the highest being Ushs. 1,000,000,000/ and one write for Plots 1 3 Kitintale way. It was upon such finding that I requested the auctioneers not to sell to allow me try to find a better buyer.
Nevertheless, the 2nd Defendant and Praful met the bank Officials and presented the proposals to them which proposals were however rejected as I was letter informed by the general Manager. Although i ignored the letters and the proposals were rejected by the bank, the bank did not take immediate steps to realise the securities. It is important to note that although it had been indicated in the letter from Global diaspora Advisory council that negotiations with the management of the company were almost complete which was to result into immediate investment of at least 3 billion shillings, no such. Consequently on the 11th day of June the bank instructed M/s. Nagwala, rezida co advocates to recover the all the outstanding amounts pursuant to which instructions the said lawyers wrote to me a letter on the 14th day of June 2007 demanding repayment of the entire outstanding sum by the 18th day of June 2007, which. I immediately notified the guarantors of the facility requiring them to ensure repayment but still no payment was made. It is clear from the matters aforesaid that the company failed to repay the loan within the entire repayment period. However although the lawyers demanded repayment by the 18th. June 2007, they did not take any steps to realise the securities and on the 3rd day of July 2007 the lawyers wrote to me the final letter demanding repayment within 10 days from receipt.
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However as a result of the uva stay i held a meeting with. Sam Ahamya of M/s Ahamya associates who had filed the suit and another resume meeting with. Praful Patel and the 2nd Plaintiff whereby we agreed to suspend the sale to enable them try to get a buyer or money from other sources. The Interim order and the suit were unconditionally withdrawn and I gave the 2nd Plaintiff and Praful the benefit of doubt to look for the money or the buyer but it was never agreed that I would not sell and or advertise the assets. Still the 2nd Plaintiff and Praful failed to get the buyer or the money and on the 3rd day of April 2007 the bank wrote to me stating that the company had not shown any ability to pay and therefore owing to the demand nature. I notified all the guarantors of the loan including the 2nd Defendant about the demand. However no payment was made by the stated date.
The bank did not act on its threat to summarily recover the loan. On the 5th day of may 2007 I receipt from Praful two letters one from. Global diaspora Advisory council and Agro Group of Industries Limited notifying me about negotiations they had held with the management of the company. I was never involved in any such negotiations as the liquidator who had the mandate to commit the company and neither was I favoured with any notification of the same. Accordingly i told Praful to get back to the authors of the letter and tell them to meet me directly such that we could discuss the contents of their letter. My request was however not honoured and as such i ignored their letters.
The extension was for another six months and as such the debt ought to have been repaid by 18th day of June 2007. From the time of my appointment up to the time of application for extension for repayment of the loan I was never approached by any prospective buyer and neither was any introduced to me by the 2nd Plaintiff and. Further during the same period i authorised the 2nd Plaintiff to reopen the mill using part of the loan facility but he miserably failed as a result of which he was chased away from the factory by the workers and the mill was closed. As such it was not possible to repay the loan at all. In light of the matters aforesaid, in exercise of my powers as the.
Liquidator, i had to protect the interest of the guarantors some of whose other properties were at stake and also ensure that the bank was paid. Accordingly i decided to advertise the companys assets for sale which was within my powers without consulting the 2nd Plaintiff. Praful Patel, not being obliged. I did not consult them because for over a year from the time of my appointment they had failed to come up with the purported good buyer and had failed also to run the factory to service the loan. On the eve of the sale of the assets as advertised I was served with an interim order staying the sale pending the determination of hccs. 141 of 2007 wherein my appointment as liquidator was being challenged. I had however received bids from only two people for Ushs. 1,250,000,000/ I had also received an inquiry from the 2nd Defendants Sister Company mukwano Industries Limited who letter told me they were no longer interested.
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It was also secured by a mortgage on land comprised in Plot 78-96 pdf Palisa road belonging to the company and Plots 1 and 3 belonging to Art Investments Limited wherein. Ravi patel and. Thakore patel are shareholders and directors. I see no basis whatsoever, both in law and common sense, for the allegation by pw 1 in paragraph 6 of his statement that upon acquisition of said facility i needed to seek fresh mandate revelation from the company because whatever I did was necessary for. The company failed to repay the loan as per the mortgage or at all and accordingly an application was made to the bank to convert the facility into Uganda shillings and thereafter grant an extension of the time within which to repay. The application was granted on the 18th day of December 2006 with the involvement. Ashwin Patel who is a valued customer of the bank.
In the circumstances it was deemed necessary for a meeting to be held with the concerned persons to find a way forward. The english meeting was held, attended by Ashwin, Praful, the 2nd Plaintiff, ravi, thakore and myself whereby it was agrred that Ashwin would help the company to secure an overdraft from Crane bank limited to pay off cooperative bank and thereafter the title to Plot 78-96. The overdraft was secured and cooperative bank was paid the said sum of Ushs. 1,000,000,000/ whereupon the title was released. After the release of the title the company applied to Crane bank limited (hereinafter referred to as the bank) to convert the overdraft into a loan facility which application was granted on the 10th day of April 2006 whereby the sum of usd 800,000 was. Repayable in six months. The loan was accordingly secured by personal guarantees from. Ashwin Patel, the 2nd Plaintiff, Mr Praful Patel,. Thakore patel and myself in my capacity as the liquidator.
capital and was heavily indebted to cooperative bank (In Liquidation) to the tune of Ushs. 1,200,000,000/ (one billion two hundred million). The cooperative bank had earlier tried to put the company in Receivership although unsuccessfully but was still threatening to. After my said appointment the debt to the cooperative bank was renegotiated to Ushs. 1,000,000,000/ (Uganda Shillings one billion) payable immediately. Since the company was un-operational it could not pay the renegotiated debt and as such alternative means of payment had to be sought. At the time of my appointment I was informed by the 2nd. Praful Patel that they had an arrangement with. Ashwin Patel to help them get a good buyer.
I am the first Defendant in the above suit in my capacity as the liquidator of African Textile mill Limited (In Liquidation) hereinafter referred to as the company. On the 13th day of may 2005 the company by way of a special resolution resolved to be wound up under owl a members voluntary winding up and as such. Clive mutiso was appointed the first liquidator. However he subsequently resigned for reasons unknown. Upon the resignation. Clive mutiso, i was appointed the liquidator of the company vide a special resolution dated 22nd day of July 2005 which was signed by the 2nd Plaintiff and. Mutiso did not hand over to any documents or file whatsoever and as such i had to compile my own file so as to perform my duties. During all the time i have been the liquidator i have not received any record of the activities.
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Download, report, description, the republic of uganda in the high court of uganda at kampala commercial division civil suit. 94 of 2008. S patel limited. Patel plaintiffs transcript, the republic of uganda in the high court of uganda at kampala commercial division civil suit. Patel plaintiffs versus. Henry wambuga (liquidator of african textile mills limited). Mukwano enterprises limited defendants : 1st defendants witness statement (DW 1) my name is sylvester henry wambuga, database an Advocate of the high court of Uganda with vast experience in Liquidation matters acquired as a result of my training as an Advocate, a lecturer in commercial.