Union Trade Centre auctioned for less than half the value (Rwanda)


By Edmund Kagrie | The East African September 27, 2017

The Union Trade Centre (UTC) mall Kigali has been auctioned for $8.1m (Rwf6.8bn) to recover taxes owed by the exiled tycoon Tribert Ayabatwa Rujugiro

The auction which took place on Monday evening saw Kigali Investment Company (KIC) buy the mall which its estimated value is at $20m. Court bailiff had put the value at $8m.

The auction which lasted over three hours opened with only three bidders showing interest at the value set by the court bailiff Vedaste Habimana. KIC, Four Unity Company and businessman Pascal Kanyandekwe put in their bids, with KIC emerging the highest bidder.

According to Mr Habimana, KIC will immediately take over the building which has more than 80 shops and office space.

“Rwanda Revenue Authority will receive part of the money to clear tax arrears of Rwf1.2bn while the rest will go into the government treasury. The company will have the building transferred to it as soon as possible,” Mr Habimana said.

The buyer handed over a $8.1m cheque.

KIC is a Rwandan investment company which currently owns different commercial assets in the City of Kigali.

Mr Rujugiro maintains that the auction is politically motivated and has nothing to do with tax arrears.

Speaking to VOA, Rujugiro alleges that the auction is a directive from elsewhere and has everything to do with politics.

“The building has been under their control for the last four years, from 2013. By the time I left, the mall was generating about $120, 000 in rent monthly, that is about $1.4m a year,”

“According to the law on abandoned properties, when a property is put under the commission of abandoned properties, 50 per cent of the revenue from that property is deposited in the central bank on the account of the owner,”

“That means if they collected $5m over the last four years, at least $2.5m is in my account. If they are saying I have tax arrears of $1.5m, why don’t they get the money from the account and pay themselves?” posed Mr Rujugiro.

Politics

Mr Rujugiro fled the country for South Africa in 2009 after falling out with ruling Rwanda Patriotic Front (RPF-Ikotanyi). He was also President Paul Kagame’s special economic advisor.

In May this year, the RRA released a list of 14 properties it said it would auction for tax defaults. UTC was one of them.

Speaking to BBC in May, Mr Rujugiro said before leaving the country, he had cleared all dues with the government.

“Before I left, we had done an audit for the last five years up to 2009 and we found that UTC owed the government Rwf20m which was cleared,” he said.

He said whoever intended to buy the mall would be doing so illegally, adding that he would repossess it.

In July, tenants including banks, retail shops and restaurants were asked to vacate the building by August 1. Some have done so after especially after rental prices were doubled.

The case Mr Rujugiro filed at the regional court, EACJ, is still pending. A hearing date is yet to be announced.

Rwanda accuses Mr Rujugiro of funding subversive activities against the government, including bankrolling exiled persons wanted by the Kigali authorities. He is considered one of Africa’s richest businessmen with a net worth well over $5 billion.

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