Log in

Stanbic, businessman in Shs 11bn legal standoff

The Cessna 5X-AMC at the centre of the legal battle is now flying in DR Congo

The Cessna 5X-AMC at the centre of the legal battle is now flying in DR Congo

Hardly three months after the Commercial court found senior employees of Stanbic bank complicit in illegally selling mortgage securities to themselves, a businessman is pinning the bank staff for frustrating his loan repayment so that they sell off his assets worth more than $3m [Shs 11 billion].

The Observer has obtained court documents and correspondences in which Ronald Lubega Kasozi, through his company Asante Aviation, implicates Stanbic bank staff in a plot to frustrate his loan repayment so that his two aeroplanes and a house are sold on the cheap.

In February, court ruled that seven Stanbic employees formed a sham company and fraudulently acquired properties that had been mortgaged to the bank for a Shs 1.06bn loan facility.

This time round, Lubega accused the Stanbic staff of conniving with third parties to ensure he fails to pay the loan so that his assets are sold on the cheap.


At the moment, the two parties are embroiled in a protracted court battle that started in 2014. According to court documents, the bank contends that Lubega owes it an accumulated figure of $2.2m [Shs 8bn] whereas Lubega insists otherwise.

Over the past seven years, this back-and-forth legal battle has already involved a controversial sale of one of Lubega’s aeroplanes, an injunction, a judgment and an appeal. Last year, Lubega dragged the bank staff to various top-level offices but nothing has been done up to now.

On July 14, he wrote to Tumubweine Twinemanzi , the Bank of Uganda head of Supervision, alleging fraud in Stanbic bank.

“In 2013, Asante Aviation sold an aircraft at a price of $1.5m …but Godfrey Twinamatsiko, the Stanbic bank manager business solutions and recoveries,  circumvented the agreement and directly agreed with the buyer to reduce the price despite objection from Asante as seller. Emails of their negotiation are attached,” reads part of the letter.

“Stanbic Bank has defiantly not addressed this matter following requests by Asante Aviation…This fraud with impunity must be stopped, reason why we are escalating this matter to you following lack of action on part of Stanbic bank.”

In another letter to Twinemanzi dated July 24, 2020, Lubega alleges that Stanbic bank staff illegally obtained a further reduction on the sale price of the aircraft of $12,500 in April 16, 2014.

“They attempted to window dress the fraud on July 31, 2014 after I reported the matter to your office, but instead aggravated the situation by charging $26,077 on the August 5, 2014, a 43% charge on outstanding capital under that facility,” reads the second letter.

The Observer could not reach out to Cathy Adengo, the Stanbic bank head of communications as she didn’t pick her number but an official in the bank who preferred anonymity said the bank does not discuss client issues in the media.


Formed in 2005, Asante Aviation’s main area of operation was contract flying to Juba, South Sudan. In 2011, Stanbic offered Asante Aviation a $4.2m loan to buy three planes and it was repayable over a five-year period. The loan facility was solely based on Asante’s other contractual obligations with clients worth in excess of $330,000 every month.

According to court documents, Lubega contends that the breakout of war in South Sudan in December 2013 greatly affected his business because aeroplanes could not fly there in that period.

So, with the lucrative Juba route cut off, Lubega and the bank embarked on negotiations in January to sell one of the aeroplanes and reduce the bank’s outstanding balance.

According to court documents, Farquhar Nicolette, the aviation specialist for Standard bank of which Stanbic is a subsidiary, valued Lubega’s Cessna C208B aeroplane at $1.75m (Shs 6.4bn) as the auction price.

Controversy sets in

An Australian company offered to buy it for $1.7m but Twinamatsiko noted that the broker of the deal did not bring a concrete offer. “So, we think an offer of $1.5m is not out of range,” he wrote in an email.

This forced Lubega to complain that Stanbic bank staff had forced a reduction of the aeroplane value of $1.75m as advised by Nicolette, resulting in a loss of $250,000 to Asante Aviation.

“To confirm value of aircraft, once buyer acquired it, he immediately insured it for $1.7m despite acquiring it for $1.5m,” reads the complaint.

According to court documents, even after the resumption of flights in May 2014, his business suffered another setback when the Uganda Civil Aviation Authority (UCAA) cancelled all locally-licensed international air operators as it assessed the safety standards. This limited all Ugandan-registered aeroplanes to domestic flights only.

Enter Muhangi

It was at this moment that both sides decided to forge a way of settling the outstanding balance. At the time, court records show Lubega had paid back $3,183,807.

In the process, Stanbic appointed lawyer Noel Muhangi of Kateera and Kagumire Advocates [Now H&G] as the receiver of Asante’s two remaining planes, a Cessna 5X-AMC and Cessna 5X-AMK.

Lubega sought court redress to challenge the process and in his ruling, Justice Christopher Madrama Izama restrained the bank from selling the aircrafts. However, the bank countersued Lubega and in a July 2020 ex-parte judgment, Justice Richard Wejuli Wabwire found Lubega liable to pay the bank $2.2m.

Lubega cited irregularities in the ruling and complained to the chief justice for redress by alleging that Wabwire made his ruling without a single court hearing.

“We believe the procedure he used is grossly irregular, and denies us justice, as no witness whatsoever ever took the stand to testify,” he says. “Additionally, the timing of the ruling on the eve of a court vacation and his action to lift temporary injunction allowing the bank to sell the aircraft was calculated not to allow time for a redress as a certificate of urgency would be required prior to filing and obtaining a restraining order.”

For the time Muhangi has acted as receiver, Lubega further accuses the bank of colluding with an aviation company, Air Serv Limited, to fly the Cessna 5X-AMC aircraft for 10 months on a World Food Programme (WFP) contract without providing payment.

When The Observer reached out the office of the chief justice, an official who preferred anonymity said the matter is too sensitive to comment on without consent from the chief justice, Alfonse Owiny-Dollo.   


At the moment, the matter is due for hearing in the Court of Appeal but when The Observer reached out to Stanbic bank, a top official from the bank who preferred not to be mentioned said the two parties have a mutual deal for Lubega to pay $1.2m, with $300,000 upfront.

When reached out, Lubega said he cannot comment on the matter until the Court of Appeal pronounces itself. An aviation industry investor who preferred anonymity told The Observer that the future of local operators will greatly depend on how this case is resolved.

“This case will have far reaching effects on local aviation investment because foreign companies are colluding to oppress local investors,” she said. “Local aviation companies are being forced to quit by been priced out of business. When are Ugandan investors ever protected from foreigners who use money to kill off local investment?”



+5 #1 Jackie Akello 2021-05-05 20:51
Honestly Stanbic bank should have put into consideration the fact that Asante Aviation was repaying the loan and also the issue of the war that affected their business to which also affected the Cash flow. Ugandan investors need to be protected too.
Report to administrator
+5 #2 Bernadette Mutuzo 2021-05-05 21:21
I believe it's time for Ugandan to come together and fight this injustice against our own! It's so absurd to see Ugandans surbotage their own.

When will we want the best for us, how do you watch a fellow citizens fall and you condone it?!

This MUST stop!
Report to administrator
+4 #3 WADADA rogers 2021-05-05 21:56
Banks in Uganda are really frustrating Ugandans, they do all that is within and outside their means to cheat whoever gets into an association with them, thieves in Government, thieves in institutions that are supposed to bail our people out.
Report to administrator
+3 #4 Mark Mugisha 2021-05-06 00:20
This issue of banks is very complicated!.
The vultures have encircled the local banks to push them out of business.

Let Ugandans support Centenary Bank instead of running to those vultures..
Report to administrator
-13 #5 Lysol 2021-05-06 01:36
Who in his/her right mind would like to fly in such a piece of junk? Unless of course, if someone is suicidal.
Report to administrator
+2 #6 VIAN RUDASINGWA 2021-05-06 06:35
The truth is that our justice system is corrupt and since we rely on courts to solve these kind of issues Mr. Lubega can only play for God's intervention for impartial justice.
Report to administrator
+2 #7 Naomi 2021-05-06 13:35
The mafia penetrated every key sector in Uganda and this has suffocated the economy of Uganda. However to every rise of a kingdom, there’s a fall....
Report to administrator
0 #8 Kuc 2021-05-09 08:47
Local investors are paying the costs of liberalisation that state owned enterprises were sold and Uganda is is just a shell of it's independence

If Asante had taken loan facility say from Uganda commercial Bank then the issue of non flights in South Sudan and CAA ban of flights hindering smooth operations of business can be listened too.

Let's have hope that the commercial courts can give justice to the local investor
Report to administrator

Comments are now closed for this entry