Diamond Trust Bank (DTB) has emphasized that Hamis Kiggundu, the proprietor of Ham Enterprise Limited, borrowed large sums of money which he failed to pay.
DTB and Kiggundu are locked in a wrangle involving over sh39.7bn the businessman reportedly acquired to facilitate his business and defaulted on payment.
Kiggundu claims the bank recovered the money in full from his dollar and shilling accounts and would therefore not pay any more money.
However, the bank has since expressed determination to recover its money.
“We wish to clarify the facts of the case which are that Ham Enterprises Ltd, a longtime customer of the bank and some of their related entities borrowed money from the bank which they failed to repay,” said DTB in a media statement sent to ChimpReports on Wednesday.
“The bank then commenced a recovery process together with the customer who made proposals on how to setttle the account which were agreed upon,” the financial institution added.
“However, Ham Enterprises Ltd then filed a suit in court against the Bank with the untrue claim that the bank never disbursed loans to them among other entities.”
DTB filed a defence in turn, promising to present the evidence in court at the appropriate time.
As the matter is under judicial consideration and is pending before the court, the bank said it could not make further comment.
The case will be heard on August 27, 2020 before the Commercial Court.
DTB’s lawyer Kiryowa Kiwanuka was quoted by New Vision as saying Kiggundu acquired the money in four tranches: $6.2m, $3.2m, $458,604 and sh2.8b from both 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 11, 2019 to DTB, Kiggundu admitted the debts and promised to repay them by selling off his complexes at Makerere.
According to documents filed in court by DTB, Kiggundu was issued with the required reminders and notice, but he still failed to pay. The bank said it notified Kiggundu that he would forfeit his commercial building and land at Kawuku, which he presented as collateral to get the loan, if he did not pay up.
Disputes of payment
When DTB decided to recover the money, Kiggundu applied in court for a temporary injunction and also challenged the bank’s action.
He also challenged an earlier order for the bank to recover any monies from him and for him to deposit 30% of the allegedly owed money with the court before the main case can be heard.
Kiggundu complained that his right to a fair hearing to stop the bank from taking his properties had been violated.
He asked the court to block the bank from taking over, selling, placing under receivership or taking any steps which are likely to interfere with his ownership of the properties which he used to get the loans.
The two parties have since signed a consent agreement where the bank agreed to forego the 30% deposit, in order to allow for expeditious hearing of the main case.
The main case is to determine whether Kiggundu owes the said sh39.7b to DTB or not.