Fraud Allegations: High Court Orders Bitature and Wife Criminal Prosecution

The Criminal Division of the High Court in Kampala has directed the initiation of a private criminal prosecution against businessman Patrick Bitature and his wife Carol Nzaro. The charges stem from an alleged unpaid loan of $10 million borrowed from the South African company, Vantage Mezzanine Fund. The High Court’s move follows delays in the lower courts, prompting concerns about a potential miscarriage of justice.

Justice Rosette Comfort Kania, in her January 8 ruling, expressed dissatisfaction with the Chief Magistrate’s Court at Buganda Road for its failure to conclude the matter promptly. Citing Article 126 (2) (b) of the Judicature Act, she emphasized that justice should not be unduly delayed. The judge invoked Section 33 of the Judicature Act, instructing the Chief Magistrate to sanction the charge sheet within five business days.

The allegations against the Bitatures involve fraud charges under Section 309 of the Penal Code Act. The South African firm, represented by lawyer Robert Kirunda, accuses the couple of conspiring to manipulate the market price of publicly sold items, leading to potential fraud against the public. The incident dates back to December 11, 2014, when Simba Properties Investment Company, owned by the Bitatures, borrowed $10 million from Vantage Mezzanine Fund.

The crux of the case revolves around the Bitatures allegedly altering the shareholding of Simba Companies, including Linda Properties Ltd, Elgon Terrace Ltd, Simba Properties Investment Company Ltd, and Simba Telecom Ltd. The lenders claim that this manipulation violates Section 323 of the Penal Code, constituting fraud and issuing false annual returns, as per Section 309.

This legal saga unfolds against the backdrop of an ongoing battle by lenders to recover their funds. An arbitrator in London ruled in favor of the lenders, ordering the Bitatures to pay about $65 million in principal, interest, penalties, and costs. The dispute returned to Ugandan courts last year, with accusations of the Bitatures attempting to dilute their shareholding to evade the award.

The recent High Court ruling came after Buganda Road Court disallowed a private prosecution application, citing lack of jurisdiction and failure to establish a prima facie case. The South African company appealed, leading to Justice Kania’s decision. As of now, it remains unclear whether the Chief Magistrate has complied with the order to sanction the private criminal prosecution.

Justice Kania defended the decision, highlighting the complexity of white-collar crimes and asserting that the local chief’s ignorance should not determine legal proceedings. She underscored the need for sophistication in addressing such crimes, challenging the notion that a layman could comprehend the intricacies involved.

In the broader context, private prosecution, initiated by individuals or private organizations, offers an alternative to state-led criminal proceedings. Section 42 (1) c of the Magistrates Courts Act empowers private citizens to make complaints and pursue criminal cases, subject to certain procedural requirements.

The ruling clarified the jurisdiction of Buganda Road Court, emphasizing that the seven-year maximum penalty for fraud falls within its purview. Justice Kania affirmed that the Trial Magistrate had jurisdiction to handle the matter, dismissing claims to the contrary.