By Spy Uganda
Kampala: The Commercial Court of Uganda is to start hearing the fraud cases facing Diamond Trust Bank this morning 31,8,2020, in which city tycoon Ham Kiggundu of Ham Enterprises is accusing the bank of fraudulently siphoning over shs120B from his various accounts in DTB bank.
The money was withdrawn over a period of time without the customer’s consent. This has since led to a legal battle, one that had led to scrutiny of all the bank’s activities.
In 2017, Francis and Stella Nekuusa took DTB to court over withdrawals amounting to UGX10 billion (KSh300 million). The bank, charged under suit no.784/2016 after committing the crime tried to take the couple’s properties.
Another customer named Yiga Musa (suit no.254/2017) filed a suit against the bank in 2016 after the bank took advantage of him not understanding and reading the English language. The bank made him sign many documents, including mortgages deeds with an intention of creating an illegal mortgage and making him a debtor and defrauded him of UGX 3,500,000,000/.
The development comes after earlier this month the Commercial Division of the High Court in Kampala trashed regulation 13 of the Mortgage Act 2012 that DTB bank was using to squeeze Ham Enterprises (U) Ltd to make a security deposit in a case in which the company alleges Diamond Trust Bank (Uganda) and Diamond Trust Bank (Kenya) unlawfully debited shs120b from its accounts.
The court ruling came after an appeal by Kiggundu said it was contrary to Article 28 of the Constitution that provides every Ugandan with a right to a fair hearing. Subsequently, Diamond Trust Bank also conceded that in the interest of justice the 30% condition be vacated and that the matter should be left to court to determine the case on its merits.
“The Mortgage Act was enacted in 2010. However, it was not until 2012 that Regulation 13 under the Mortgage Regulation 2012 that requires payment of a 30% deposit was smuggled into the laws of Uganda as a photocopy to the income tax law which required a taxpayer to pay URA a deposit of 30% on an assessment before they could challenge such assessment at courts of law, ” Ham Enterprises said in its appeal.
“Banks have always used this law (Regulation 13) to push their clients to the wall denying them the right to a fair hearing.”
Background Of The Case.
Diamond Trust Bank (Uganda) and Diamond Trust Bank (Kenya) argue that Kiggundu received a credit facility totaling over shs41b a few years ago and he still owes them about shs39b. In turn Kiggundu, accused the banks of fraudulently siphoning over shs200b from his accounts without his knowledge and consent over the past 10 years.
The banks adds that as of January 21, 2020, Kiggundu was in default on payment obligations of $6.298m on the loan facility of $6.663m, as well as sh2.885b on the demand overdraft facility of sh1.5b and the temporary demand overdraft facility of sh1b.
They further claim that Kiggundu was in default on the payment of another $3.662m out of a total loan facility of $4m and another $458,604 on a loan facility of $500,000, as of January 21, 2020.
However Kiggundu revealed that this was a financial fraud since the money was fraudulently withdrawn from both his dollar and shilling accounts were in excess of what the bank was demanding. “They said they had carried out an audit of my bank accounts and discovered that the money was siphoned off over a period of 10 years” Kiggundu said.
He highlighted that a total of sh29.035b, was unlawfully debited from his shilling account, while $22.93m was withdrawn from his dollar account under what he calls unclear debits. Kiggundu, who has been accessing loan facilities from the bank for over 10 years, issued a notice to the bank terminating his relationship and withdrawing the mortgage instruments.
Watch the space we shall keep you posted!