Banks Gang against Ham Kiggundu after court makes landmark ruling

Banks Gang against Ham Kiggundu after court makes landmark ruling

The Uganda Bankers Association (UBA) has joined the appeal against a landmark ruling in favor of city Tycoon Hamis Kiggundu. Kiggundu who has been battling with Diamond Trust Bank (DTB) Kenya and Uganda over a loan he received, submitted that Diamond Trust (DTB) Kenya which lent him some of the money was not licensed to operate financial services in Uganda. Justice Adonyo ruled that indeed Kiggundu had no obligation to pay because the process of giving him the money was not legal.

A few minutes after the ruling, which has sparked a banking crisis, Diamond Trust Bank vowed to appeal the verdict. Uganda Bankers Association (UBA) says that the ruling sets precedence for other parties that have obtain similar loans to default. Government is one of the beneficiaries of the practice of syndicated loans in which a bank works with another bank to secure loans to service a client.

Wilbrod Humphrey Owor, the UBA Executive Director says banks were not satisfied with the ruling and would join the appeal.

A statement from UBA indicates that it had decided to:

1. To join Diamond Trust Bank (U) Ltd as an interested party in its appeal at the higher court to determine the case on its merits.
2. To join Diamond Trust Bank (Uganda Limited) to file for a stay of the execution of the orders of Hon Justice as ruled yesterday
3. To call upon the Central Bank of Uganda to pronounce itself on this matter
4. To call upon the executive arm of Uganda Government through the Minister of Finance, Planning and Economic Development and the Attorney General to pronounce themselves on this matter, more so because they are the accountable officers for syndicated facilities contracted by Government including where foreign counterparts are involved and re-assure the financial sector, international lending partners and the entire country of the commitment to continue honouring all debt obligations in line with the agreed protocols.
5. To call upon our esteemed good borrowers and all customers to remain calm as appropriate action is undertaken to address the challenges arising from this specific judgement.
6. To call upon our friends and stakeholders including Uganda Insurers’ Association, PSFU, UMA, KACITA, Telecom Sector Players, ULS, Members of Parliament, Civil Society, Uganda Investment Authority, Capital Markets Authority, Financial Intelligence Authority, Uganda Revenue Authority, Professional Bodies among others as well as the Judiciary itself to join us in addressing the implications of this judgement and assist in avoiding the adverse effects this judgement could lead the country and the economy into.