The raging court battle between city businessman Hamis Kiggundu and Diamond Trust Bank (DTB) is raising questions that may in fact leave the “tycoon” even more exposed after it emerged that the case may be a ploy to allow the businessman buy time and find ways of paying back the billions of shillings borrowed from DTB.
In January this year, Ham Enterprises owned by businessman Hamis Kiggundu took Diamond Trust Bank (DTB) to court arguing that the bank had “fraudulently, illegally and irregularly debited huge sums of money,” from its account. It sought to recover Shs 100 billion.
In its part, DTB had moved to recover monies owed by businessman and his related group of companies. The bank had moved to fast track the material case which it argued was a question of audit to establish whether the businessman’s accounts were wrongly debited as claimed by the plaintiff.
In its bid to have the material case handled expeditiously and without further delays, DTB voluntarily sought to waive the 30% advance payment requirement that would have the businessman deposit close to USD 2 Million with the courts before the case could commence.
Those privy to this case say that the businessman was unable to raise the money and consequently used legal technicalities to cause adjournment and delay the hearing of the material case.
According to court documents, Kiggundu acquired the money in four tranches; USD 6.2 Million, USD 3.2, USD 458,604 and Shs 2.8 Billion both from DTB Uganda and DTB Kenya between February 2011 and September 2016. The loans were consolidated later in 2018 and were to run for five years ending August 23, 2023.
In a letter dated April 2011 to DTB, Kiggundu acknowledged the debt and promised to pay them by selling his properties in Makerere. Court Documents filed by DTB show that Kiggundu was served with reminders and notices but still failed to meet his obligations.
After several adjournments instigated by Ham’s lawyers, the case came up for hearing on August 27, 2020. During the proceedings, a preliminary matter was raised by Ham’s lawyers who filed a separate application for it, alleging that DTB(Kenya) was carrying out illegal banking business in Uganda by lending money to Ham Enterprises.
They also stated that DTB(Uganda) was facilitating and abetting the illegal conduct of Financial Banking Business in Uganda contrary to the Financial Institutions Act.
A statement by Uganda Bankers Association (UBA), though not aimed directly on this matter, sought to reaffirm that the banking sector in Uganda was robust and solid but required borrowers to meet the loan obligations so as to allow the industry to continue offering affordable credit to the economy.
The statement acknowledged the process of loan syndication which involves a group of lenders funding portions of loan to a single borrower.
Loan syndication often happens when a borrower requires an amount too large for a single lender to provide or when the loan is outside the scope of a lender’s risk exposure levels.
Even though the businessman has had a long standing relationship with DTB and other banks and financial institutions, there are constant murmurs about his style of doing business which in some circles has raised questions about the source of his funds.
For instance, a number of businessmen and prominent personalities came out openly to deny claims that they were part of Ham’s dispute with DTB.
Businessman Yiga Moosa, who operates from Entebbe and deals with produce amongst other businesses, said he was shocked to see his name being dragged into the matter which he says he has no knowledge of.
“We have absolutely no issue with DTB Bank and we know they are reliable and professional partners in business since they have supported us to grow some of our businesses,” he said.
The businessman says he started banking with DTB in 2016 and in 2017, there is a small matter that arose but was settled amicably which in the right way to do business as partners.
“I had an issue of delayed repayments with DTB but this matter was resolved and all the payments were settled. I do not see why anyone would now want to drag my name in their own disputes. If anyone is in default, he should pay his obligation or discuss on how to pay since everyone is facing some hardships during this period,” said Yiga.
Questions also abound about his award and handling of the Nakivubo Stadium project which critics say has stalled because Ham failed to pay contractors and other services providers.