Businessman Ham Kiggundu & DTB Bank, Who was in the wrong?

Some time back, Prof. Augustus Nuwagaba wrote in the Daily Monitor Newspaper about business man Ham Kiggundu Versus Diamond Trust Bank (DTB) case in which DTB Kenya accessed Ham’s Bank account in Uganda to withdraw funds as part payment for the loan Ham has acquired through DTB Uganda and not DTB Kenya. A court in Uganda ruled that it was improper for DTB Kenya to withdraw money from Hams account since he was dealing with DTB Uganda.  Prof. Niwagaba faulted the judges arguing that they erred in their judgement. Apart from speculating that the ruling will hurt the Ugandan economy, which is a fallacy, he didn’t explain fully his fears as to why the learned judge erred in judgement. To me, this was one of the best commercial cases best adjudicated in a very long time. We are aware that the low financial liquidity in most developing countries including Uganda limits their lending capacity of large loan amounts and on long term as well. Majority of them have low levels of liquidity. Infect most of them are struggling. This however doesn’t mean that they should circumvent procedures. DTB Uganda is a sister company of DTB Kenya. They therefore work closely together because their shareholders are the same. And this is what they took for granted, which was a mistake. If DTB Kenya wanted to lend to Ham, all it needed to do was to pass over the loan to Ham through DTB Uganda and not involve themselves with Ham at all. It was not necessary for DTB Kenya to create any dealings with Ham because the Ugandan law doesn’t allow them. Ham didn’t need to know that the loan he had been given came from Kenya. He would therefore be indebted to DTB Uganda. Full stop. He would thus be required to pay back to DTB Uganda.  To qualify my assertion, it’s like if I give money to Nuwagaba and I go to demand from his friend to pay me back. However close the friend may be, they cannot be held culpable for third party incidences.

Nuwagaba says this court ruling is likely to be injurious to Uganda’s economy. Far from it. It will in fact enhance it because investors will hence forth act with caution knowing that they must operate within the law. A company operating in a different country with a branch in Uganda does not afford the luxury of getting business deals in Uganda by proxy. Moreover without meeting any tax obligations. This in itself tantamount to money laundering.  It should be discouraged and I expect Nuwagaba to be the first to support this judgement. One of the reasons why the banking sector in Uganda has remained fragile is because it has been held with kid gloves for far too long. Moreover, 90% of all these banks are foreign owned. They are ridiculously heartless and money minded to such an extent that none thinks out of the box by initiating new methods investment that would help the economy to grow. They think that by overcharging clients, they will make a lot of money. They act as cartels. They are like scavengers feasting on the circus of Uganda’s ailing economy.  Nuwagaba should know that it is in the best interest of banks in Uganda to lower their interest rates. It’s in their interest to make as many Ugandans as possible become bankable. Banks should target to grow the number of Ugandans interested in banking services. It is not in their interest to charge the fees they do currently. Bad enough, no body calls them to order because they are all foreign. They are in fact sucking the Ugandan economy dry. They have no incentives, neither are they bringing any new innovations. All they do is to raise the required sum to be allowed to operate in the country and right away they start milking the economy. I could go on and on. The bottom line is justice Odonyo who made the ruling made Uganda proud. This judge must be one of the most patriotic Ugandans still living. DTB and indeed any other foreign bank for that matter should never be allowed to operate in Uganda without the due legal process.

AFTERTHOUGHT: Two weeks ago, I visited a certain bank. I was inquiring about their mortgage loan services. I had been referred by a friend who told me that the said bank offered the most competitive mortgage rates in town. To say that I was shocked by their rates is an understatement. I had asked for 200 million for a period of ten years. When I tried to calculate, I would be required to pay 4 million per months which comes close to one billion in ten years. This is crazy. It is madness. How can I build a house of 200 million and I am charged 1 billion in ten years. What type of reasoning is this? No wonder many peoples homes are being auctioned everyday. These are the same banks that Nuwagaba is seeking to protect! Long live Justice Adonyo for giving us fresh air, at least for a while. Shake them Ugandan banks. Shake them till they come to their senses

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