Buganda Road Chief Magistrate Tuhimbise Valerian has withdrawn criminal summons he had earlier issued against Prince Karim Al-Husayn Shah, the founder and chairman of the Aga Khan Fund for Economic Development.
Aga Khan, together with Massimo Mohamed Devji, Group Chief Executive Officer and Managing Director DTB (K) Ltd, Varghese Thambi, Chief Executive Officer DTB (U) Ltd and John Sitakange, Head of Credit DTB (U) Ltd were on Tuesday summoned over theft and other four counts including; making false entries in financial ledgers, electronic fraud, uttering false documents and conspiracy to commit a felony in the ongoing multi-billion case between DTB and businessman Hamis Kiggundu alias Ham.
However, the DTB (U) lawyers K&K Advocates faulted the move and argued that the matters in question are already before the High Court and the Supreme Court and that the summons were issued without full knowledge of the relevant facts.
Withdrawing the summons in a letter dated September 15, 2021, Tuhimbise said, “The Director of Public Prosecution (DPP) has pursuant to article 120 (3) (b) of the Constitution of the Republic of Uganda taken over criminal proceedings on this matter wherein you are the complainant.”
“The purpose of this letter, therefore is to inform you that the criminal summons which were issued in this matter on 13th day of September, are consequently withdrawn,” Tuhimbise told Ham through his lawyers of Muwema & Co. Advocates Solicitors.
In May 2021, Court of Appeal ordered the Commercial Court to hear the merits of a multi-billion lawsuit between two banks and businessman Ham.
Justices Richard Buteera, Kenneth Kakuru and Christopher Madrama unanimously ruled that Commercial Court judge Henry Peter Adonyo had erred when he faulted the lending arrangement and allowed the businessman’s Ham Enterprises to recover Shs34b and $23.2m (about Shs84b) from Diamond Trust Bank (DTB) Uganda and Kenya .
“The judgment of the trial judge is set aside,” Deputy Chief Justice Buteera said and awarded costs to the banks. “An order is granted remitting the suit back to the Commercial Division of the High Court to be expeditiously fixed and heard by another judge.”
The matter arose last January when Ham, through his companies, sued DTB Uganda and Kenya for alleged breach of contract. The businessman had borrowed money from the two institutions and had fallen behind on his repayments. However, when the banks attempted to collect their dues the businessman went to court, citing irregularities in the lending arrangement.
Ham sought declarations that the bank breached different loan agreements entered into between February 16, 2011 and November 16, 2019. In their defence, the banks denied any breach of contract.
The lending institutions said the businessman and his two companies held accounts with them and on various dates borrowed $6,663,453, Shs1.5b, Shs1b, $4m and $500,000. The financial institutions also argued that DTB Uganda acted lawfully and that it was not an agent for its Kenyan counterpart. Justice Adonyo declared that since DTB Kenya was not licenced to conduct financial business in Uganda, the loans extended to Ham Enterprises were irregular, null and void.
He also held that by acting as a collecting agent for DTB Kenya, DTB Uganda had contravened the Financial Institutions Act and Agent Bank regulations.
The judges from the higher court however faulted Justice Adonyo for not having heard the merits of the case. Justice Buteera said there is no law in Uganda that makes it illegal for a Ugandan citizen or a foreigner resident in Uganda to borrow or pay back money borrowed from a foreigner, foreign institution or bank.
“A loan agreement with a foreigner or a foreign entity whether the contract is executed in Uganda or outside Uganda, would be enforced by a Ugandan court in accordance with the terms of the agreement between the parties, the laws of the respective countries in which the agreement is made,” he ruled.
Mr Ham had also sought declaration that DTB-Kenya was not licenced to conduct financial institutions business in Uganda and that, therefore, the credit facilities it offered him were irregular.
Lawyer Fred Muwema, who was representing the businessman, said he was dissatisfied with the ruling.
“Since the court has shied away from pronouncing itself on the illegalities, we don’t accept to go back for a retrial; we are going to appeal, even if it means going to the East African Court,” he said.
The matter arose last January when Ham, through his companies, sued DTB Uganda and Kenya for alleged breach of contract. The businessman had borrowed money from the two institutions and had fallen behind on his repayments. However, when the banks attempted to collect their dues the businessman went to court citing irregularities in the lending arrangement.
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