Earlier this week, Uganda’s Supreme Court and as had been largely expected, given that invisible fat cats are involved in this case, declined to condemn Diamond Trust Bank (Kenya) for carrying out unlicensed banking in Uganda. Led by Chief Justice Alphonse Owiny Dollo, the five justices, instead justified and gave a green light to `syndicated` banking involving foreign banks and non-banking entities.
Dollo claimed that such `syndicated` banking isn’t regulated by the local banking laws. He justified this by saying that syndicated banking is a necessary evil since local banks cannot find the kind of money foreign banks are capable of providing at the shortest call and notice. After that, Dollo and his panel returned the file back to the High Court where a judge, Dr Henry Peter Adonyo had previously decided in favor of Ham. He said he threw it back for the retrial of the matter before another judge.
It should be recalled that Ham had agreed to an audit to establish if over one hundred twenty billion shillings was illegally removed from his accounts by DTB Uganda under the guise of repaying the loans he had taken from DTB Kenya. He would later on abandon that stance and introduce the illegality of these banking transactions, presumably aware that it was the easiest way of skinning DTB Kenya which had incidentally admitted carrying out unlicensed banking with him.
After buying into Ham’s argument and ruling in his favor, Justice Adonyo was instantly and swiftly bundled out of the commercial section of the High Court courtesy of the stance he had taken over this live-wire issue.Financial institutions backed by their umbrella association, Uganda Bankers Association, and their regulator, Bank of Uganda, had instructively responded with venom following Adonyo’s ruling.
That stance by Bank of Uganda, yet the regulator is notoriously and infamously known for not responding to voluminous public concerns over exploitative and extortionate games that financial institutions oftentimes engage in. That anger by the banking industry players quickly prompted the Principal Judge, Dr Flavia Zeija to quickly send for the file from the commercial court and to quickly arrest Adonyo’s ruling.
After the Principal Judge sitting on the case file for several months, the same was finally sent to the court of appeal which officially reversed Adonyo’s ruling. But both curiously and interestingly, the three justices of that court would leave unresolved, the issue of illegality of the transactions which DTB Kenya had carried out in Uganda with Ham and, which, Adonyo had based on previously to rule in Ham’s favor.
Ham then appealed to the Supreme Court which has taken eighteen months to finally rule on the legality of the impugned transactions by clearing them as being legal. In the final analysis and as we have indicated already in these lines, the stakes involved here are so high that Ham is unlikely to end up surviving this live-wire saga.Put the other way, foreign banks are so powerful being that they are owned by internationally powerful people including this one of DTB. For that reason, the weak African governments which depend on foreign aid to thrive and their courts, by the way, cannot afford to antagonize them. But for now, time will tell.
Author Profile
- Mr. Stephen Kasozi Muwambi is a seasoned crime investigative writer, majoring in judicial-based stories. His two decades’ experience as a senior investigative journalist has made him one of the best to reckon on in Uganda. He can also be reached via [email protected]
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