JUST IN: Loan Ham took from Diamond Trust Bank was legal, Court orders businessman to pay costs - Daily Post Uganda

JUST IN: Loan Ham took from Diamond Trust Bank was legal, Court orders businessman to pay costs

Ham Kiggundu and his lawyers at court (File Photo)

KAMPALA: The Supreme Court has ruled that the loan Kampala businessman acquired from Diamond Trust Bank Uganda and Diamond Trust Bank Kenya was legal, send ing Kiggundu into agony.

All five judges agreed in the judgement on Tuesday, pushing the issue of illegality back to the High High Court for retrial before a different judge.

They said the transaction between DTB Uganda, DTB Kenya and Kuggundu was part of syndicated lending which is recognized internationally.

The judges dismissed allegations that DTB Uganda and DTB Kenya were agents under the Financial Institutions Agent Bank Regulations didn’t apply to this transaction

Kiggundu was ordered to pay DTB 50 percent of the costs in Court of Appeal and Supreme Court.

Kiggundu’s lawyers led by Fred Muwema had argued that the loan was illegal since it was issued by DTB Kenya which is not registered to do business in Uganda, claiming the transaction violated the Financial Institution’s Act, 2004.


In October 2020, Justice Adonyo ordered Diamond Trust Bank Uganda and Kenya to refund more than Shs 120 billion they illegally deducted from two accounts of Kiggundu.

In August 2020, Kiggundu petitioned the court after 85 billion Shillings and 34 billion Shillings were illegally deducted by DTB Uganda and DTB Kenya from two accounts of his companies without his knowledge and consent. The companies are Ham Enterprises and Kiggs International Uganda Limited.

The documents indicate that between 2011 and 2016, Kiggundu through the two companies acquired loans totalling to 41 Billion Shillings from DTB Uganda and Kenya to finance his real estate businesses on condition that he mortgaged his properties in Makerere Hill, Kawuku, Kyadondo and Victoria Crescent Road among other plots of land.

However the banks reportedly served him with documents indicating that he has not met his loan obligation worth 39 billion Shillings as per their agreement and threatened to take over the properties he had mortgaged. As a result, Kiggundu petitioned the commercial court saying that the money that was withdrawn from his dollar and shillings accounts was excess yet he had also fully paid the loan.

Justice Adonyo ruled that DTB Uganda became a principal offender by facilitating the commission of an offence by allowing DTB Kenya which did not have a license to operate in Uganda to do financial businesses in the country.

Adonyo ordered the two banks to refund all the money that was illegally taken from Kiggundu’s accounts amounting to Shs 34bln and 23m dollars [85 billion] immediately.

The court also ordered the two banks to return all his land titles citing that the evidence on record indicates that all the loans the businessman had obtained from DTB Uganda were fully settled.

The two banks were also ordered to pay Kiggundu an interest of eight percent of the money as well as costs for the suit.

However, this ruling forced Diamond Trust Bank Uganda and Kenya filed a notice of appeal challenging the Commercial Court decision directing them to refund Shs 120b to Kiggundu.

In the notice, the two banks through their lawyers of K and K Advocates noted they were not contented with the ruling by Justice Henry Peter Adonyo who said they had given Kiggundu money illegally as they allegedly violated the Financial Institutions Act, 2004.

“Take notice that Diamond Trust Bank Uganda Limited and Diamond Trust Bank Kenya Limited the above-named defendants being dissatisfied with the Judgement and order by Honorable Dr Justice Henry Peter Adonyo delivered on October 7, 2020, intend to appeal against the whole decision to the court of Appeal” reads the notice in part.

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