HAM VS DTB: REAL FACTS OF THE 120 BILLION FRAUD CASE

HAM VS DTB: REAL FACTS OF THE 120 BILLION FRAUD CASE

Top Kampala businessman Hamis Kiggundu has sought the quick intervention of the Chief Justice Alfonse Chigamoy Owiny-Dollo, following a letter in which the Principal Judge blocked the execution of commercial Court order which directed Diamond Trust Bank (DTB) to refund Shs34b and $23.2m (Shs86b) which they unlawfully withdrew from Ham Enterprises’ accounts. The High Court judge additionally directed Bank of Uganda as the implementing authority to take the required regulatory action as mandated by the Ugandan Constitution to implement the law provisions in accordance with the intention of the law such as to protect the Ugandan economy from illegal hemorrhages and uncontrolled flows of financial resources and ensure that financial institutional business in Uganda is operated within the letter of the law to protect the nascent banking business industry in Uganda.

However, in a shift turn of events, the Principal Judge Flavian Zeija on Tuesday night undermined and blocked this order; an action that could have been done by Justice Adonyo during the day (If at all it had to be done.)

It is a well-known fact that the major functions of the Principal Judge are typically administrative and may perform other duties as assigned/delegated by the Chief Justice. The actions of Principal Judge contravene his sworn oath and the major role of the court system which is to uphold and safeguard the constitution of Uganda at all times in addition to: protecting the rule of law, upholding democratic principles and administering justice to all Ugandans as provided by Articles: 138 and 141 of the Ugandan Constitution.

Principal. Judge Flavian Zeija’s Order that he made at night

It is against that background, Mr Hamis Kiggundu commonly known as Ham petitioned Justice Dollo saying Judge Flavian Compromisingly picked a suspicious interest in the case given the fact that he is a former Banker. “We seek your urgent intervention as head of the judiciary in Uganda to issue such orders and directions necessary for the proper and efficient management of our client’s case as you may please,” the letter dated October 13 reads in part.

                                      Ham’s Letter to Chief Justice

Ham indicated that Justice Henry Adonyo of the Commercial Court delivered a ruling striking out the bank’s statement of defence and entered judgment in his favor upon the reliefs he sought. “However, the hearing of the interim order application did not take place because we learnt from the Commercial Court that the Principal Judge had called for the file. We wish to state that as counsel acting in this case, the office of the Principal Judge has not favored us with any official correspondence indicating its actions to be taken in our client’s matter,” he adds.

“Whereas the Principal Judge as head of the High Court can call for any file in the High Court pursuant to his administrative functions under Article 141 of the Constitution, those powers cannot be understood to extend to the exhibition of continuous interest in one file to the extent of calling for it and interfering with its hearing whenever any proceeding in the case upsets or is likely to upset the defendants,” the letter further states.

Not the first time

Mr Kiggundu’s lawyers listed some of the instances where his file has been called; calling for the file and summoning the deputy registrar Dr Agnes Nkonge during the hearing of a temporary injunction.

He further noted that the file was also called on July 9, after lawyers of the bank complained about the allocation of the file to Justice Duncan Gaswaga who was hearing his appeal against the order of payment of 30 per cent.

“The principal judge has again called for the file for the third time and we have reason to believe that this has been done again at the prompting of the defendants who are unhappy with the recent ruling of the court,” reads the letter.

“We question why the Principal Judge who is not an allocated judge sitting in the judgment of our client’s case should take away his file at a time when the defendants are seeking an interim order to stay execution of orders, he neither issued nor can stay in law,” the letter further reads.

Flavian Zeija Undermined and Blocked Execution of the High Court Judgement at night

The interim order that was issued by the principal judge will be in place until the main application for stay of the execution orders is determined.

The interim order from the Principal Judge means that Ham cannot commence the recovery process of the aforementioned money from the bank, neither can the Bank of Uganda implement the law provisions by taking any regulatory measures against diamond Trust Bank neither can Bank of Uganda take necessary actions to ensure that provisions of the law are implemented in accordance with the intention of the law. It’s a core role of the Central Bank (BOU) to protect the Ugandan Economy from illegal hemorrhages and uncontrolled flow of financial resources and to ensure that Financial Institutions Business in Uganda is operated within the letter of the law to protect the nascent banking business industry in Uganda as earlier ordered by Justice Adonyo.

Could the Bank of Uganda be Undermining the Orders of the Honorable High Court towards protecting the Ugandan economy from illegal hemorrhages and uncontrolled flows of financial resources and implementing the laws of Uganda or justifying its negligence?

When Concluding his Landmark ruling, Hon Henry Peter Adonyo, the head of the Commercial Division of the High Court in Uganda directed the Bank of Uganda as follows; “I do issue directives to Bank of Uganda which is the implementing authority under the Financial Authorities Act 2 of 2004 As Amended to take such necessary actions and measures to ensure that the provisions of the law is implemented in accordance with the intention of the law such as to protect the Ugandan economy from illegal hemorrhages and uncontrolled flows of financial resources and to ensure that financial institutional business in Uganda is operated within the letter of the law to protect the nascent banking business industry in Uganda.”

However, in a shocking response, Mr. Emanuel Mutebile the governor bank of Uganda noted in a press statement that “It is not mandatory for a foreign Bank to establish to establish a representative office in Uganda in order to conduct lending activity” which statement contravenes; Section 126 (3) of the Financial Institutions Act, 2 of 2004 (As Amended) which provides that: A financial institution which does any act prohibited by this Act or fails to do anything required by this Act commits an offense and where no specific penalty is provided, the financial institution is liable on conviction to a fine not exceeding two hundred and fifty currency points and in the case of a continuing offense, to an additional fine not exceeding fifty currency points for each day on which the offense continues.

While Regulation 5 (1) of the Financial Institutions (Agent Banking) Regulations 2017 expressly bars such a transaction if not approved by Bank of Uganda. It provides that: “A financial institution shall not conduct agent banking in Uganda without the prior written approval from the Central Bank.” Which regulation was further contravened by DiamondTrust Bank Uganda as cited by Hon Henry Peter Adonyo.

Touch/click on Image to see full document

Legal Definition of A financial Institution/Financial Institutions Business by the Ugandan Constitution as Faulted by the Regulator

It needs to be emphasized that the terms of these sections of the law are couched in mandatory terms coupled with punishment for noncompliance, which beyond doubt makes it absolutely mandatory to comply with them. Diamond Trust Bank Uganda and Kenya had to seek approval and or license from the Central Bank of Uganda and or any other authorized entity. They did not.

Thus, Bank of Uganda which is the implementing authority cannot be seen to undermine the orders of the honourable High Court of taking the necessary actions to protect Uganda’s economic independence through ensuring that all operations violating the good health of the Ugandan economy are stopped and appropriate action taken against those netted in the act such as Diamond Trust Bank Uganda.  He could not be the governor of the regulating authority to come out openly and start defending the law-breaking Institutions against the specified law penalties in the Constitution.

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