The commercial division of the Hight court has halted the execution of the orders issued by the head of Commercial court justice Henry Peter Adonyo in a multibillion case between business tycoon Hamis Kiggundu and duo Diamond Trust Bank (DTB)-Uganda and DTB-Kenya.
Principal judge, Dr Flavian Zeija issued the interim orders on Tuesday in the presence of the bank’s lawyer Kiryowa Kiwanuka and Usama Sebuufu. Kiggundu’s lawyer who has since been served wasn’t present in the court.
“An interim order for stay of execution of the decree in high court civil suit number 43 of 2020 and MA number 654 of 2020 doth issue pending the determination of the main application for stay of execution”, reads the order in part.
According to the order, the costs of the suit will be determined in the main application, in which DTB-Uganda and DTB-Kenya are seeking to stay the execution of Adonyo’s orders pending the determination of their appeal.
The appeal stems from a ruling last week that saw justice Adonyo declaring the Shs 41 billion loan DTB-Kenya advanced to Kiggundu illegal since the bank isn’t licensed to operate in Uganda. He also noted that DTB Kenya didn’t seek permission or clearance from the central bank to conduct business in Uganda, which is contrary to the laid down procedures.
Adonyo also noted that DTB-Uganda acted like an agent for DTB-Kenya contrary to the Financial Institutions Act 2004. He directed both banks to return Kiggundu’s land titles and all the monies confiscated from his accounts with an interest of eight per cent as well as paying him costs of the suit.
Background Of The Case.
Diamond Trust Bank (Uganda) and Diamond Trust Bank (Kenya) has been arguing that Kiggundu received a credit facility totalling over shs41b a few years ago and he still owes them about shs39b. In turn, Kiggundu accused the banks of fraudulently siphoning over shs200b from his accounts without his knowledge and consent over the past 10 years.
The banks add that as of January 21, 2020, Kiggundu was in default on payment obligations of $6.298m on the loan facility of $6.663m, as well as sh2.885b on the demand overdraft facility of sh1.5b and the temporary demand overdraft facility of sh1b.
They further claim that Kiggundu was in default on the payment of another $3.662m out of a total loan facility of $4m and another $458,604 on a loan facility of $500,000, as of January 21, 2020.
However, Kiggundu revealed that this was a financial fraud since the money was fraudulently withdrawn from both his dollar and shilling accounts were in excess of what the bank was demanding. “They said they had carried out an audit of my bank accounts and discovered that the money was siphoned off over a period of 10 years,” Kiggundu said.