Desist from maligning court judgements, Ham warns UBA

Ham also challenged UBA to give an account of all taxes payable to the treasury against interest payment remitted on the syndicated loan portfolio, which the association last Thursday had reported to be about Shs5.7 trillion.  

“It would appear that UBA has felt the shockwave of the judgment because it exposes the hitherto undisclosed foreign loans which have been escaping regulatory oversight by the Central Bank and which are eligible for taxation by Uganda Revenue Authority,” the letter said, noting that instead of maligning the ruling, UBA should applaud the judgement for directing the Central Bank to carry out its duty and enforce the law to regulate foreign lending.  

The Central Bank at the weekend said in a statement it was awaiting the full judgment to announce itself on the contents therein and its implication on the banking sector. 
However, it did not address the claims by Ham that indicated it had failed to regulate the foreign lending space. 

Similarly, the Ministry of Finance said in a statement that there had been concerns from stakeholders in regard to the status of syndicated loans but called for calm, committing that government would repay all its obligations from both syndicated financing arrangements and public debt.

“Government wishes to reiterate its commitment made to all its financing partners in respect to all procured and future syndicated loans and assure them that it will undertake all its obligations,” the statement, signed by Dr Sengonzi Damulira of Ministry of Finance, said last Thursday. 

However, at the weekend Ham dismissed claims that the judgment passed by Justice Henry Peter Adonyo of the Commercial Division of the High Court had in effect banned syndicated loans, wondering why anyone would call a judgment that seeks to ensure compliance with the law, reckless. 

In a strongly-worded statement last Thursday, UBA had said the “reckless judgment” had put a portfolio of Shs5.7 trillion ($1.53b) held in syndicated loans at stake and would embolden borrowers with foul intentions to default, anchoring their actions on the judgment.  

In the statement, which Ham claimed was later amended to delete the word “reckless judgment”, UBA had also rallied a number of stakeholders, among them the private sector, government Bank of Uganda and regulatory and professional bodies to join in to address the implications of the  judgment to avoid the adverse effects it could have on the country.  

The move came at the backdrop of a ruling in which court had indicated that DTB Uganda had provided DTB Kenya an illegal cover in which the latter purported to have lent Ham Enterprises and others some $4.5m in an $8.4m loan application. 

In March, Ham, owned by Mr Hamis Kiggunddu, a Kampala businessman, sued DTB Uganda and DTB Kenya accusing them of money laundering and siphoning his accounts. 

Court also directed DTB to refund Ham some $23m and Shs34b, which the company claimed had been siphoned from its accounts in at least nine years. 

Ham also wondered why UBA had not acted on some of its errant members that abuse its core values of integrity, transparency, professionalism, good governance and service excellence but had instead resorted to attacking a judgment that sought to ensure a well governed banking system.

Mr Owor at the weekend declined to comment on Ham’s claims, noting they had said whatever they wanted to say in the Thursday statement.  

“We are not going to make any further comments. We shall now let our legal teams take it over from here,” he said.

DTB has already filed a notice to appeal and UBA has indicated it will avail its legal team to support an appeal that will seek to strikeout the decision of Justice Adonyo. 

Meanwhile

In a twist of events, Equity Bank at the weekend sold Simbamanyo House on Lumumba Avenue and a hotel in Luzira over a dispute involving a Shs38.6b loan. 
The case, filed by Muwema Advocates and Solicitors had ingredients similar to the one in the Ham verses DTB case, premised on loan advances drawn from Equity Uganda and Equity Kenya. 
Last month, Equity, acting through Katende Ssempebwa & Co Advocate and AF Mpanga, Advocates, had warned that it would after October 7 sell properties contained in plots on Lumumba Avenue and Mutungo-Luzira, if Simbamanyo Estates fails to pay Shs11.5b.
The payment resulted from a ruling in which court had directed Simbamanyo to pay 30 per cent of the disputed Shs38.6b, failure of which Equity would  sell properties against which the money was advanced.
A last Thursday notice to tenants had indicated the properties had been sold to Meera Investments, which both Equity and Sudhir Ruparelia the chairman of Meera confirmed. 
It was not immediately clear whether Meera had also bought the hotel in Luzira, the other property at the centre of  the dispute.

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