Uganda Bankers’ Association (UBA), an umbrella organization for financial institutions licensed and supervised by Bank of Uganda is to join Diamond Trust Bank (DTB) in appealing against court’s ruling in the loans case against Ham Enterprises Ltd, owned by businessman Hamis Kiggundu.
Commercial Court head Justice Henry Peter Adonyo on Wednesday ruled that the credit facilities DTB-Kenya offered to Ham Kiggundu are illegal since it is not licenced by Bank of Uganda as required under the law to carry out financial business in Uganda and therefore directed DTB to refund Shs120 billion which was debited from the accounts of Ham plus interest of 8% (shs9.6 billion).
“Uganda Bankers Association has learnt of the judgment delivered yesterday 7th October 2020 in the High Court of Uganda (commercial division) arising from an interlocutory application in H.C.C.S No 43 of 2020 involving one of our members, Diamond Trust Bank (U) Ltd and related parties.” Reads part of the press release.
Although UBA is yet to receive a copy of the detailed judgement, the ramification of the judgement has sent shock waves across the entire industry and related stakeholders.
The Chief Executives of all the 35 member institutions of Uganda Bankers Association that includes all the tier I commercial Banks the Development Banks and Tier II & III (Micro Finance and Deposit taking institutions) supervised by Bank of Uganda this morning resolved to join DTB in its appeal at the higher court.
“To join Diamond Trust Bank (Uganda) Limited as an interested party in its appeal at the higher court to determine the case on its merits.” Reads part of the resolutions taken by the Chief Executives of all the 35 member institutions.
“To join Diamond Trust Bank (Uganda) Limited to file for a stay of execution of the orders the Hon Justice as ruled yesterday.”
The association also called upon all concerned parties to pronounce themselves on the matter.
“To call upon Central Bank of Uganda to pronounce itself on this matter.”
“To call upon the Executive Arm of Uganda Government through the Minister for Finance, planning and Economic Development and the Attorney General to pronounce themselves on this mater, more so because they are accountable officers for syndicated facilities contracted by Government including where foregoing counter parties are involved and re-assure the financial sector, the international lending partners and entire country of the commitment to continue honoring all debt obligations in line with agreed protocols.”
UBA also called upon esteemed good borrowers and all customers to remain calm as appropriate action is being taken.
“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.”