Kampala; Diamond Trust Bank is locked in a ferocious battle with Kampala Businessman Hamis Kiggundu, in a bid to recover an UGX39.7bn loan.
Details of the dispute have been grey and hazy. Today, we reveal the facts.
Between February 2011 and September 2016, young tycoon Kiggundu alias Ham of Ham group of companies acquired a loan from the branches of Diamond Trust Bank (DTB) both in Uganda and Kenya in American dollars and Ugandan shillings respectively.
According to DTB Lawyer Kiwanuka Kiryowa, Kiggundu acquired the loan in Four tranches of USD6.2M (about Ugx 22.3b) USD3.2M (about Ugx 11.5b), USD4586 (about Ugx1.6b) and Ushs2.8b.
The loan was consolidated in late 2018 for a period of five years ending on 23rd August 2023.
According to the agreement, the bank would recover the money by deducting 30% (thirty percent) of Kiggundu’s deposits in the bank for the five year period.
However, Bank lawyers said, when DTB started to recover its money from Kiggundu, he started crying foul, saying that the bank was deducting money from his account without his consent. He later rushed to the commercial court and applied for an injunction stopping the bank from recovering their money.
Ham also filed a civil suit in the Commercial Court, which has a hearing for August 27, 2020, to determine whether he owes the said debt to the bank.
The two parties also signed a consent agreement where DTB agreed to forego the 30% deposit, in order to allow for an expeditious hearing of the main case to determine whether Kiggundu owes the said Ushs39.7b to the bank or not.
A banking expert said last night, Kiggundu could have run into financial trouble after investing money in low yield real estate projects.
He is currently undertaking an investment in real estate in Kawuku on Entebbe road called Ham Palm villas. “Ham knows the laws governing loan agreements under the loans act of 1965. He is not telling the whole truth. How can a bank with which you have a loan obligation deduct money from your account without your consent?” the banking expert said.
“By rushing to court he is trying to buy time. He knows the villas may not fetch money immediately, because these days its hard to find buyers. The economic shock wave has not spared the real estate industry just like other key sectors of the economy,“ the banker said.
Industry analysts say that Kiggundu is servicing big loans with two other banks.
In 2018, Kiggundu published a book titled: Success And Failure Based on Reason and Reality, in which he narrates his manoeuvres in the business world.
Sources close to Ham say he collects between ushs3-4bn monthly from his real estate.
He recently told the Public Accounts Committee of Parliament that the development of Nakivubo Stadium would have been much slower than it is, had it not been for loans he secured from banks.
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