In 2013, Haruna Sentongo, an enterprising young businessman, hatched a project that would endear him to his parents.
It would also help him keep scores with his more successful and flamboyant brother, Hamis Kiggundu.
Sentongo had just opened Haruna Shopping Mall in Ntinda, following his Haruna Towers in Wandegeya Kubiri, and was brimming with business confidence.
His next idea was to construct two shopping malls on a strip of land in Kisenyi, downtown Kampala, to honour his parents, Hajj Ssegawa and Hajjat Nakayiza, who had been instrumental in his rise.
Unlike Ham who enjoys the limelight, Haruna is an introvert. He rarely makes eye contact with the person he is talking to. He is laid back.
However, he has a competitive streak that has at times put him at odds with his brother according to someone who relates closely with the brothers.
“Haruna and Ham have always been in some kind of competition to see who accumulates more wealth or who builds better buildings. It is healthy competition, but it has at times brought friction between the two,” said the mutual friend, requesting anonymity.
Yet as he pushed for his marquee project in Kisenyi and tried to get one over his brother, little did Sentongo know that the move would threaten his business empire and probably destroy it.
Here is how it happened.
Enter a bank loan
To get his two projects up and running, Sentongo needed money, which he did not readily have.
In early December 2015, he walked into the main branch of I & M Bank (then called Orient Bank) along Jinja Road and asked to see the manager.
He wanted a loan of Shs 8 billion to execute his projects. The manager said the board will have to sit and consider his request since it involves huge amounts. He was asked to hand in all the documentation to support his application, which he duly did and told to wait for the bank to get back to him.
A few days before Christmas in 2015, he received a call from a senior manager at the bank and was told to find his way there for a meeting.
The bank told Sentongo they could not give him Shs 8 billion based on their assessment of the collateral he had provided.
For a start, they said, they could grant him Shs 5 billion, and extend overdraft facilities in case he needed more money.
It is not the outcome Sentongo had wanted, but with Jingle bells ringing and Christmas mood setting in, he was not in the mood for a fight.
Christmas Day came and went, and 2016 beckoned.
In January 2016, the bank started drafting the loan agreement documents. Sentongo was anxious.
On Friday, February 19, 2016, Sentongo was informed by the bank that the loan documents would be ready for signing by Monday (February 22).
After his gym work at Haruna Tower in Ntinda, he jumped into his Land Cruiser and, with beads of sweat still dropping from his face, put pen to paper on the loan deal.
The loan had a grace period of one month and he was required to deposit some money on his account to cater for at least four months of repayments.
Sentongo assured the bank that the bulk of the loan would be serviced through rent collections from Segawa Market once the building was ready.
Work starts
Within three months, Segawa Market had taken shape thanks to the two daily shifts of construction workers, he deployed.
However, along the way, he figured that he needed more money. Sentongo had run out of money and needed to put the final touches on Segawa Market. He has also embarked on the construction of Nakayiza Market in the neighbouring plot.
He rushed to I &M Bank and asked for an overdraft of Shs 100 million. The bank obliged.
Two months later in July, 2016 Sentongo was back. This time he wanted an additional Shs 1.5 billion and even staked more collateral, including plots of land in Naguru.
With this money, he reasoned that he would complete the two buildings and that the loan would be repaid.
The bank obliged but added one condition: Rental proceeds from Segawa Mall had to be strictly routed through it.
Recap: At this point, Sentongo had been given three loan facilities (the Shs 5 billion obtained in February, the Shs 100 million in May and Shs 1.5 billion in July) by the bank.
Music starts
On October 14, 2016, Sentongo told the bank that he wanted to amalgamate his three loans (combine them into one), a request the bank accepted.
However, the bank brought to his attention the fact that his loan repayment account was in negative (-184 million), meaning the bank was demanding this money.
A year later, Sentongo opened the buildings to business, but tenants did not immediately take to it. Initially, Sentongo wanted tenants to pay rent for a year upfront, but reduced this to six months after the response was poor.
By this time, he had started to fall behind on his loan repayments. The interest on the loan was accumulating.
On June 2017 after several reminders, the bank issued Sentongo with a notice of default. It claimed that the loan had now ballooned to Shs 10.2 billion.
Sentongo became evasive and got tough on his tenants, but this did not work. In 2018, the bank took him to court seeking to have its monies repaid.
Sentongo counter-sued, claiming, like Ham had done during the DTB case, that the bank had inflated the figure. He claimed that according to his own calculation, the figure was less than Shs 8 billion.
Hearing of the case was delayed by Covid-19. However, in 2023, the High Court concurred with the bank and ordered Sentongo to repay Shs 10.3 billion with interest of 6%.
Sentongo appealed the ruling, but today, the Court of Appeal sided with the High Court.
“The learned Judge found that the Appellant (Sentongo) had not proved his claims against the respondent (the bank) and therefore dismissed them. The appellant, Mr. Haruna Sentongo, is indebted to the respondent, Orient Bank Limited, now I&M Bank (Uganda) Limited, in the sum of Shs 10,384,396,959,” the Court of Appeal ruled today.
Court also ordered Ssentongo to pay 12.5% per annum as interest on the shs10.4 billion since January, 22, 2019, the date of filing of the suit.
Sentongo can still appeal in the Supreme Court, but his business empire is in trouble.
What do we get to learn from all this! We the upcoming city tycoons. Trying to make ends meet?