Ugandan tycoon Mukesh Shukla's Kampala towers cleared for sale over debt

An Ugandan court has cleared the way for two commercial properties belonging to Mukesh Shukla's Shumuk Group to be attached and sold to recover a debt of Shs173.36 million, about $46,300.

Assistant Registrar Samuel Kagoda Ntende of the High Court gave Springs International Hotel 30 days to pay or see Condominium Units 67 and 68 on Plot 2, Colville Street, in Kampala's central business district, go under the hammer.

The company opposed the attachment, arguing the units are worth more than Shs1 billion, roughly $267,000, and that selling them to recover a debt a fraction of that size was disproportionate. The court rejected the argument.

The judgment arises from Civil Suit No. 314 of 2018. Five creditors applied to enforce it after the company failed to pay: Angella Katatumba, the Ugandan singer, alongside Rugiirwa Katatumba, Charles Odere, Benson Tusasiirwe and Julius Turinawe.

They are pursuing the estate of the late Bonney Mwebesa Katatumba, the Kampala businessman and honorary Pakistani consul whose family has been in litigation with Shukla for more than fifteen years.

A building bought for a tenth of its price

The dispute traces to a sale agreement that was never completed.

Katatumba agreed to sell the property to Springs International Hotel for $4 million, with $361,000 payable immediately and the balance of $3.639 million within sixty days. Springs paid $420,000, leaving $3.58 million outstanding, according to court records. Shukla's companies took possession of the building around 2008 and have occupied it since.

The property was known as Blacklines House and later as Katatumba Suites. It now trades as Shumuk House.

In December the High Court's Commercial Division ruled that Shukla, Springs International Hotel, Shumuk Springs Development and a related company had been occupying part of it without legal authority, and ordered them to pay roughly Shs14 billion, about $3.74 million, in mesne profits.

The same ruling cancelled the transfers made in favour of Springs International Hotel and held that ownership remained with the Katatumba estate until the original sale agreement was completed. Companies linked to Shukla were directed to vacate a number of condominium units by March.

An appeal on the ownership question remains before the Court of Appeal.

The bank judgment

The Katatumba litigation is not the only claim against him.

The High Court ordered Shukla and his companies in June to pay Bank of Baroda Uganda more than Shs16.4 billion, about $4.38 million, arising from an unpaid commercial loan. The bank sued after efforts to recover the outstanding sum failed.

Taken together, the two judgments come to roughly Shs30.4 billion, or $8.12 million, by Billionaires.Africa's calculation, against a group now unable to settle a Shs173 million debt without losing property.

The Shumuk Group

Shukla is an Indian-born Ugandan businessman known throughout Kampala as Shumuk. He is executive director of Shumuk Aluminium Industries and controls a group that includes Springs International Hotel, Shumuk Springs Development and Shumuk Financial Services, alongside property holdings in central Kampala.

He built the business over decades in a country whose Asian commercial community was expelled by Idi Amin in 1972 and encouraged to return from the 1990s onward.

Telephone calls to numbers linked to him went unanswered, according to UG Standard. Neither Shukla nor his companies has commented publicly on the latest ruling, and no indication has been given as to whether the Shs173 million will be paid within the thirty days.