KAMPALA: The hearing of the main application for stay of execution of the High Court civil Suit number 43/2020 in Ham vs DTB Uganda case kicks off tomorrow Monday 26 October.
The Principal Judge Flavian Zeija had earlier blocked the payment process of UGX34b and $23.2m (UGX86b) which the Diamond Trust Bank (DTB) allegedly deducted from Ham Enterprises’ accounts.
Ham Enterprises could not commence the recovery process of the aforementioned money from the bank as earlier ordered by the head of the Commercial Court, Justice Henry Peter Adonyo.
Adonyo ruled that DTB Kenya (DTBK) acted illegally in lending money to Ham Enterprises owned by flashy businessman Hamis Kiggundu, through Diamond Trust Bank Uganda.
The Syndicated loan facility totaled Shs. 39.7bn which the businessman acquired to facilitate his business and defaulted on payment.
In his Ruling, the judge had stated that DTBK couldn’t lend money to Kiggundu because it had not been licensed to conduct business in Uganda.
The ruling quickly sent shockwaves through the banking sector in the country, in which a massive chunk of loan facilities are syndicated.
In response, Diamond Trust Bank with support from other commercial banks under the Uganda Bankers Association rushed to the High Court to block execution of this ruling.
DTB together with Bankers’ Association had warned that the ‘reckless’ court ruling endangered the entire Syndicated loan portfolio in the country which is in excess of Shs. 5 .7Trillion.
These further warned that the ruling could embolden loan defaulters and also hurt foreign investor confidence.
However, Mr Ham Kiggundu in response stressed that the court ruling doesn’t nullify Syndicated loans but reprimanded illegal banking activities in the country.