By Mable Nakibuuka
City businessman Hamis Kiggundu, popularly known as Ham, is sweating plasma because he is likely to lose his swanky mansion in Kawuku, along the shores of Lake Victoria, the expansive Ham Shopping Mall in Makerere and several other properties around Kampala.
This is because Diamond Trust Bank Uganda has appealed High Court Justice Peter Adonyo’s judgment, in which he ruled that Diamond Trust Bank Uganda and Diamond Trust Bank Kenya should compensate Ham Enterprises and Kiggs Ltd money amounting to over Shs120 billion, after they allegedly unlawfully withdrew money from his accounts and conducted illegal financial transactions by lending him money.
Justice Adonoyo’s ruling, which DTB U has since appealed, was premised on three key issues;
That DTBU and DTBK committed an illegality when they entered into a syndicate agreement to extend a financial asset of USD10,000,000 to Ham, well-knowing that DTBK didn’t have a license to transact banking business in Uganda.
That by DBT entering into an agreement with DTBK to conduct syndicate lending in Uganda it was equally an accomplice in the crime and liable to being penalized in accordance with the Financial Transactions Act.
The ruling was also premised on Ham’s allegations that despite having fully paid the loan facility, DTBU and DTBK had unlawfully deducted Shs34,295,951,553 and USD23,467,670.61 from the accounts of his companies, yet they had a foreclosure on his property comprised in Kyadondo Block 248 Plot 328 land at Kawuku, FRV 1533 Folio 3 Plot 26 – 38 Victoria Crescent II Kyadondo and LRV 3716 Folio 10 Plot 923 Block 9, land at Makerere Hill Road.
However, the most important issue which was overlooked and or tactfully omitted by Justice Adonyo in his ruling was a forensic audit of Ham’s accounts and it is this which DTBU wants to capitalize on in the court of appeal.
According to our insiders in the bank, this is because Ham fears that if the actual transactions on his bank statements and a court-sanctioned audit is conducted on his accounts, Justice Adonyo’s ruling will be watered down and overturned by the court of appeal.
The insiders reveal that indeed, Justice Adonyo also knows this loophole in his ruling, reason why he ensured that he buried the opportunity for DTBU to submit Ham’s audited accounts in court by ruling in his favour on September 30th, 2020, to stay the audit.
Ham and Justice Adonyo Coalition
It should be noted that on August 31st, 2020, Hon. Justice Adonyo, by consent of the two parties (Ham and DTBU), ordered that a court-appointed auditor would be found to carry out audit and reconciliation on Ham’s accounts, to determine if indeed he had repaid the banks and whether in actual sense there was any money unlawfully deducted from the businessman’s accounts.
The trial Judge (Adonyo) indeed went ahead to order that an independent auditor be appointed by the Institute of Certified Accounts of Uganda (ICPAU). ICPAU appointed BDO Uganda, which is part of BDO Global, one of the 5 largest accounting firms in the world to do audits.
However, in a surprising move, while DTBU waited for BDO Uganda to commence the auditing process, Ham would on September 16th, 2020, abruptly change his mind and file Miscellaneous Application No 729 of 2020, seeking to stay the appointment of the auditor and the audit itself, until court pronounced itself on whether the said loans from DTB Kenya were illegal.
On 30th September 2020, Justice Adonyo, without considering the vital fact that the audit of Ham’s accounts would be crucial in substantiating his allegations, ruled in favour of Ham Enterprises and Kiggs Ltd, staying the audit.
To the detriment of the Bank’s interest in the case, Justice Adonyo stayed the audit and reconciliation of Ham’s accounts, thereby dimming any hopes of ever knowing the truth if indeed Ham had repaid the loans as he claimed and if indeed any money had been unlawfully deducted from his accounts as he alleged.
It was therefore surprising that without the audit in question being completed, Justice Adonyo would on 7th October 2020 go ahead to rule that DTBU and DTBK should refund Ham’s companies Shs34,295,951,553/= and USD 23, 467, 670.61 (Shs86.8 billion) which he alleged had been illegally drawn from his accounts.
Suffice it to note that the decision was decided upon by a judge in a court that had not seen or been acquainted with any information regarding the affected accounts, which was very crucial evidence on which to base determine whether indeed Ham had repaid the loan facility as he claimed, and whether indeed the Banks had unlawfully deducted money from his accounts as he alleged.
It is this matter that DTBU wants to capitalize on in their appeal, to ensure that court issues an order for the auditing of Ham’s company accounts, to determine how much he repaid of the said loan facility and how much was indeed unlawfully deducted from his accounts.
However, our sources reveal that Ham is very afraid of an independent audit being conducted on his accounts, let alone being made public in court, because of the repercussions it will have on his entire business empire and personal property, reason why he was quick to file Miscellaneous Application No. 729 of 2020 seeking a court injunction to stop it, which was verily and quickly granted to him by Justice Adonyo without any hesitation.
On the other hand, Court also ruled that DTB Kenya conducted financial institution business in Uganda without a license and therefore the said credit facilities were illegal and therefore unenforceable.
Court also said that by DTB Uganda, accepting to be an agent of DTB Kenya in a transaction that was illegal, it had also violated the Financial Institutions Act and was therefore a principal offender under the Act and therefore liable to being penalized.
However, the same court overlooked the matter that by Ham Enterprises accepting to partake in the purported illegal transaction with DTBU and DTBK, he also became an accomplice of the illegality and hence is liable to prosecution too, for engaging in illegal financial transactions well-knowing he is conducting an illegality, receiving money under false pretense, fraud, among other offenses.