Connect with us

Hi, what are you looking for?

Cyprian Is Nyakundi

Business

Terrorism-linked DTB Bank loses first round in Sh3.5 billion fraud case

Nasim Devji, DTB CEO

The High Court in Uganda has rejected a plea by terrorism-linked bank DTB to have an independent auditor carry out a full account reconciliation of the financial transactions Ham Enterprises and Kiggs International (U) Ltd over illegal withdrawal of UGX120 billion (Sh3.5 billion).

Justice Dr Henry Peter Odonyo of the High Court’s commercial division ruled that there was a case number 654 of 2020, that was pending that sought to have the respondents’ (DTB) joint written statement of defense struck out by reason that it is founded on credit facilities which are illegal and in contravention of the Financial Institutions Act, 2004 (as amended).

Hamis Kiggundu, the owner of Hams Enterprises had sued DTB Bank for withdrawing the huge sums of money from his account without his consent.

Ham Enterprises in court papers proves that DTB fraudulently withdrew UGX 29,035,682,682 billion (Sh857 million) account and USD 22,938,528.29 Million (Sh2.4 billion) from their shillings and dollar accounts as per the account statements for a 10-year banking relationship that they had operated those accounts.

It emerged in court that DTB had debited the accounts in an attempt to recover loans the businessman had acquired to finance his business ambitions.

Ham Enterprises (and two others), a long-time customer of DTB, took to court through HCCS No. 43 of 2020 to raise questions regarding the legality of the credit facilities and contracts executed between the respondents and applicants, which questions are still pending determination by the court. And before these are solved, Ham Enterprises argued that an audit cannot be executed, to which court agreed within a ruling delivered on 30th September.

By going to court, Kiggundu was seeking to recover the money; the bank responded with a defense that he countered through Misc. Application No. 654 of 2020. The bank acting-wise asked court to impose regulation 13 that required Kiggundu to deposit monies in court amounting to 30% of the disputed sums.

Kiggundu successfully challenged the imposition of regulation 13 saying it is a hindrance to article 28 of the Ugandan Constitution which provides a right for every Ugandan to a fair hearing. Kiggundu said that as a victim of bank fraud, it would be unfair to stake such huge sums as was necessitated by regulation 13 then. With this victory, the High Court resultantly allowed the hearing of Kiggundu’s fraud case filed against Diamond Trust Bank (Uganda and Kenya) to proceed.

On the other hand, DTB decided to call for an independent joint audit to revisit the transactions made between the applicant and respondent. This was granted but a swift Kiggundu countered it saying allowing this would enable the bank to backtrack and clean up their mess ahead of the ruling of the main case.

Justice Adonyo had directed the Institution of Certified Public Accountants of Uganda to appoint an independent auditor to carry out account reconciliation of the financial transactions which are based on the credit facilities between Ham Enterprises and DTB on August 31, 2020.

But now, after carefully considering arguments from both sides, Justice Adonyo has stayed the decision to hire an independent auditor pending hearing and determination of Misc. Application No. 654 of 2020.

“The implementation of the Court Order issued on 31st August 2020 directing the Institute of Certified Public Accountants of Uganda (ICPAU) to appoint an independent auditor to carry out a full account reconciliation of the financial transactions which are based on the credit facilities between the Plaintiffs and Defendant to determine the amounts due inter parties be stayed pending hearing and determination of Misc. Application No. 654 of 2020,” the Justice said, adding that each party should bear their costs.

Hams Enterprises was presented by lawyer Fred Muwema while Kiwanuka Kiryowa represented Diamond Trust Bank, the respondent.


Would you like to get published on this Popular Blog? You can now email Cyprian Nyakundi any breaking news, Exposes, story ideas, human interest articles or interesting videos on: [email protected] Videos and pictures can be sent to +254 710 280 973 on WhatsApp, Signal and Telegram.


Comments

comments

Click to comment

Facebook

You May Also Like

News

*Editor’s Note: This open letter to Safaricom has been published as received. No redactions have taken place to avoid legal issues pending a court...

News

This is an intervention for Victoria Rubadiri so as to help her revert back to factory settings. We notice your slow drift away into...

News

Caption : Edwin Kigen Who was Murdered in Madaraka Estate. We demand for answers from Boinnet ! Another young man may have been brutally assaulted and...

News

CAPTION: Reformed street-urchins like this lot are dominating the airwaves and being allowed to spread the disease of anti-intellectualism.  As you may have all...

Copyright © 2020 Cyprian Is Nyakundi.