The attempt by Diamond Trust Bank (DTB) to have an independent auditor carry out a full account reconciliation of the financial transactions Ham Enterprises and Kiggs International (U) Ltd, companies owned by Hamis Kiggundu, had with Diamond Trust Bank (Uganda and Kenya) has been quashed by Justice Dr. Henry Peter Odonyo of the high court of Uganda (commercial division) on Wednesday because there is a case pending (Misc. Application No. 654 of 2020) to be solved regarding the said transactions.
Through Misc. Application No. 654 of 2020, the applicants’ Ham Enterprises and Kiggs International (U) Ltd and Hamis Kiggundu) 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).
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.
The ruling that gave businessman Hamis Kiggundu the boastful victory over the regional commercial bank was delivered in the presence of lawyers for both sides – Fred Muwema for Hamis Kiggundu, the applicant, and Kiwanuka Kiryowa for Diamond Trust Bank, the respondent.
Since January this year, Ham Enterprises’ proprietor Hamis Kiggundu has been engulfed in court battles with the commercial bank alleging that DTB siphoned over Shs100bn (now estimated at Shs120bn, plus profits) from accounts he held at the bank in an attempt to recover loans the businessman had acquired to finance his business ambitions.
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.
Not giving up without a fight, 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.
