Ham, DTB row: A 10-year relationship on the edge

One of the properties on Makerere Hill Road, which DTB had indicated it will sell to recover part of the Shs41b. PHOTO |FILE 

By Dorothy Nakaweesi

The noise is too loud to be ignored. It is louder than usual and tells of a case that will have many
dusting ears.
Many Ugandans, rightly so, will be seeking to understand the fuss behind the noise, much of which is just but an extravaganza of a twisted narrative.
From the onset, the pulling and shoving has been there for everyone to see. Indeed, it will be a test that will determine the direction of a relationship that has lasted close to 10 years.

Ham Enterprises, founded by Hamis Kiggundu, has had a business relationship with Diamond Trust Bank (DTB) since 2011.
It is indisputable, the relationship has been mutual and beneficial to the two.

However, a case filed on August 10 stands tall and will determine which way the relationship will go thereafter.
The case has come with a lot of shoving and exchanges and will definitely turn a corner on one or all the parties involved.
It is a high profile case with built up stakes, driven by external influencers rallied around a certain narrative.
Bloggers, online publishers and social media influencers have been working overnight perhaps to skew facts behind the case.
Indeed it is not surprising that some bloggers and online publishers have taken the fight at DTB’s doorstep, declaring the bank bankrupt and rallying customers with the intention of perhaps causing a run on the bank.

Rightly so, DBT has called the trend a malicious rumour, seemingly driven by paid up individuals or a group of people to drive a ‘toxic’ narrative.
In a statement mid this month, DTB said, it had noticed a trend of inaccurate reporting suggesting the bank was not viable.

This, the bank said mid this month, might have a connection to the ongoing case, noting it could be “a deliberate smear campaign targeted against the bank”.

However, whereas it is not clear who is behind the purported inaccuracies, Kiggundu has lately launched a campaign, criticising the banking system of being an unfair partner in business growth and development of Ugandans.
He has also called for reforms in the banking sector in both in print media and online publications.

In response, Uganda Bankers Association has come out to defend the banking system, noting that whereas there is need for more reforms, the banking sector had already adopted a number of consideration and reforms amid a difficult environment.

Efforts to reach Kiggundu for this article have been futile. For at least three days to Friday last week, he had not picked or returned our repeated calls to his known mobile phone number. He had as well not replied our text messages by press time.

However, details before court offer some explanations and tell of a story of a strained relationship that will leave either of the parties with a serious financial dent.

According to details before the Commercial Division of the High Court, on August 10, Kiggundu filed a case in court, accusing DBT of facilitating fraud and money laundering.

In the case, which has two respondents, DBT Uganda and DTB Kenya, Kiggundu together with Ham Enterprises and Kiggs International, acting through Muwema & Company Advocates and Solicitors, accuse the two banks of overdrawing his account and providing a cover for DBT Kenya to conduct money laundering.

The case argues that since DTB Kenya is not registered in Uganda to conduct financial services, it is an act of fraud for it to be purporting to have advanced loan facilities to Kiggundu and his companies.
DBT Uganda is a subsidiary of DTB Kenya and since 2011, according to details in court, the two have been extending loan facilities to Hamis Kiggundu and his companies.

However, the contentious facilities, which seem to be the origin of the raptured relationship, were advanced between 2015 and 2017.

The loans, which were delivered in different tranches and on different dates, have a consolidated value of Shs43.8b, at least according to a DTB defense filed through K&K Advocates, formerly of Kiwanuka & Karugire Advocates.

Court documents indicate that Kiggundu, had been meeting his part of repaying the loans, drawn from DTB Uganda and DTB Kenya, until on June 21, 2018, when he first informed the bank of challenges in his financial flow.

After over three months, the bank consequently reminded Kiggundu and Ham Enterprises of the outstanding sums that needed be to cleared, failure of which DTB would take other measures to recover its money.

The outstanding loan, according to court documents, stands at about Shs41.1b, which means that by the time Ham Enterprises was issued with a default notice on November 19, 2019, only Shs2.73b had been paid.
Before the default notice was issued, the two companies had been exchanging a number of correspondences some of which had sought to find alternatives of how the matter would be settled.

However, after everything had failed, DTB decided to foreclose on collaterals against which the loans had been advanced.

In a defense filed by DTB, the bank indicates that out of the $6.66m that had been advanced, Ham Enterprises or the other involved parties, had only paid $370,000, leaving an outstanding balance of $6.29m.

Other facilities indicate an outstanding amount of $3.66m out of the $4m and $458,604 out of the $500,000 that was advanced.

Ham Enterprises has also since defaulted to the tune of Shs2.85b on two overdraft facilities with a combined value of Shs2.5b.

However, in details filed before court, Ham Enterprises, Kiggs International and Kiggundu accuse DTB of illegally overdrawing their accounts, making illegal deductions and fraudulently siphoning money out of accounts held with the bank.

Ham Enterprises also accuse DTB Uganda of providing an illegal cover for DTB Kenya to conduct financial transactions in a country where it is not registered.

Part of the money, which had been advanced to Ham Enterprises, Kiggundu and Kiggs International, had been drawn from DTB Kenya.

However, Ham says DTB Kenya had been illegally debiting his accounts and is praying that court forces it to refund at least Shs34.2b.

Ham Enterprises has also since written to the bank terminating his relationship with DTB. However, DTB insists that whereas it is unfortunate to lose such a long-standing relationship, which is within the right of the client, it will seek to ensure that it legally recovers the outstanding sum.

Court details also indicate that Kiggundu contends that his companies or himself are not indebted to DTB and therefore, the bank should release all titles against which the loans were advanced.

DTB has already indicated it will foreclose on properties contained in a plot in Kawuku, Kampala District, where Kiggundu has a palatial residence, Victoria II Crescent in Kyadondo and Makerere Hill Road, which formerly housed Tuskys Supermarket.

Malicious rumour
For some time now, there has been a coordinated campaign to blackmail DTB.

Recently, in a statement DTB, called the campaign a malicious rumour that is seemingly driven by paid up individuals or a group of people to drive a toxic narrative.

DTB said, it had noticed a trend of inaccurate reporting suggesting the bank was not viable, which was not true.

Other claims that DTB
DBT has also indicated that Kiggundu dutifully benefited from loans drawn from DTB Kenya and the bank has enforceable jurisdiction to recover the money under dispute.

The bank also denies accusations that it provided an illegal cover for fraud, noting that Kiggundu, is only seeking to delay the recovery of its money and therefore shall be put to strict verifiable proof to back his claims.
DTB also indicates that through different correspondancies, Hamis Kiggundu or his agents had been made aware of his indebtedness and had, at some instances suggested plans through which the debt would be settled.

dnakaweesi@ug.nationmedia.com