Diamond Trust Bank (DTB) has moved to enforce the sale of two properties in Soroti linked to companies associated with businessman and former NRM Vice Chairperson for Eastern Uganda, Capt. Mike Mukula, over an outstanding loan reportedly worth Shs3.4 billion.
According to information contained in a notice issued by the bank, the properties were pledged as security for a credit facility that has since accumulated to the reported Shs3.4 billion.
DTB is now seeking to recover the outstanding money after the borrowers reportedly failed to clear the debt. The bank has, through its lawyers, K&K Advocates, issued a 30-day notice giving the borrowers an opportunity to settle the outstanding amount.
The notice warns that should the debt remain unpaid within the stipulated period, the bank could proceed with enforcement measures, including the sale of the secured properties in accordance with the applicable legal procedures.
The development puts the two Soroti properties at risk of being auctioned as DTB seeks to recover the money advanced to the borrowers.
The case also highlights the risks associated with using valuable property as security for commercial loans, particularly when borrowers are unable to meet their repayment obligations.
As of the issuance of the notice, the borrowers have been given the 30-day period to clear the outstanding debt and potentially prevent the bank from proceeding with the sale of the properties.
