dtb Following Wednesday’s court ruling in which Judge Henry Peter Adonyo blamed Diamond Trust Bank Uganda (BoU) in partnership with Diamond Trust Bank Kenya for giving a syndicated loan to businessman Hamis Kiggundu, the Bank of Uganda has come out to say it awaits a detailed ruling so as it can comment about the ruling that has left the local bankers confused.
“Bank of Uganda…has taken note of the judgment of the Commercial Division of the High Court…involving M/S Ham Enterprises… We await the detailed written judgment of the Court to assess its implications and to determine to determine an appropriate response therefore, including any future actions with regard to the matter,” says BoU Governor Prof Emmanuel Tumusiime-Mutebile.
Yesterday Chief Executive Officers from all the 35 financial institutions under the umbrella of Uganda Bankers Association (UBA), urged BoU, Ministry of Finance, Uganda Revenue Authority, Uganda Investment Authority and the Civil Society amongst a host of others to take keen interest in Judge Adonyo’s ruling that seemed to favoured Kiggundu not to pay a loan owed to Diamond Trust Bank Uganda and its partner Diamond Trust Bank Kenya.
DTB Uganda and DTB Kenya want Kiggundu to acknowledge that he must pay a loan of over Shs39.7 billion which his company Ham Enterprises borrowed to enable him run business activities but then defaulted on paying back the loans. Kiggundu acquired the loans in four tranches; US$6.2 million, US3.2 million, US$458, 604 and Shs2.8 billion from DTB Uganda and DTB Kenya. The loans were consolidated later over two years ago and were to run from five years, ending August 23, 2023.
Judge Adonyo in his ruling, stated that by DTB Kenya lending to Ham Enterprises, it contravened Financial Institutions Regulations No.5 and that DTB Uganda was culpable of breaking the law and therefore deserved punishment for carrying out “unauthorized” activity.
Members of Uganda Bankers Association (UBA), are now up in arms against the ruling and have decided that they will be part of the case when Diamond Trust Bank Uganda appeals in a higher court. This is because the bankers say they already have offered syndicated loans worth over 5.7 trillion and that Judge Adonyo’s ruling could puts that money at the risk of not being paid.
Interestingly, bankers under their umbrella of UBA say the Shs5.7 trillion now at risk excludes the money that was being arranged as a syndicated loan to fund oil pipeline and that […]