Ham Enterprises,Lawyers;Muwema, Arnold Kimara response to Uganda Bankers’ Association

Muwema and Company Advocates & Solicitors, together with M/s
Kimara Advocates & Consultants act for Ham Enterprises Ltd, Kiggs
International (U) Ltd and Kiggundu Hamis, the Plaintiffs in the above

Our attention has been drawn to the media release you published on the
8th day of October 2020 in respect of a ruling issued in the above matter
by Hon Dr Henry Peter Adonyo, the Head of the High Court Commercial
In the media release which you circulated electronically on social media platforms, you referred to the said ruling as a reckless judgement on the
unfounded allegation that it declared syndicated loans in Uganda to be illegal.
In another version of the media release which carried your signatures, you panicked and withdrew One word reckless from the statement but the
damage had already been done.
What we find very odd is that you were capable of sustaining such a
malevolent attack on the judgement of the Court without citing a single law or regulation to support your assertions.
Since you have not demonstrated a full understanding of the facts and
the law governing our Clients’ case, we have had no option but to correct

your deliberate misrepresentation and false alarm about the ruling and
judgement in the case.
You are however responsible for the flurry of fake news arising from your missive which has done a considerable job in misinforming the Banking
sector and all stakeholders alike.
For the purpose of bringing back some respectability and sobriety to the
subject, we wish to highlight some of the important points and correct
implications which can be discerned from the case:
a) Our Clients’ case against DTB Uganda was for the recovery of
colossal sums of money in the amounts of US$ 23M and Ugshs.34Bn.
These amounts were unlawfully debited from our Clients’ accounts for a period of over nine (9) years.
b) The High Court rightly entered judgement in favor of our Client for the
above sum against DTB Uganda after it struck out its defence on
account of the illegalities which had been established.
c) This is not the first time nor the last time that a Bank Customer has
accused or will accuse a Bank of such predatory and unethical conduct
of financial pilferage.
d) We wonder why the UBA has not come out to condemn some of its
errant members who go against the UBA core values of integrity,
transparency, professionalism, good governance and service excellence.
e) The illegalities raised against DTB Uganda and DTB Kenya which
they both failed to counter in the suit were two fold, namely:
i. that DTB Kenya was not licensed to conduct
financial institutions business in Uganda as it did
not obtain permission to do so from the Central
Bank of Uganda under S. 117 Financial
institutions Act, 2004 (as amended),
ii. that DTB Uganda acted in contravention of its
license, the Financial Institutions (Agent Banking)
Regulations, 2017 and the Financial Institutions
Act vide S. 126 when it acted as an Agent Bank of
DTB Kenya, without first obtaining approval to do
so from the Central Bank of Uganda.
(f) The High Court ruling/judgement was promoting good banking practice
which UBA is supposed to Stand for when it insisted that the FIA must
apply to all banking transactions undertaken by DTB Uganda and DTB
(g) Why would anyone find a judgement which ensures compliance with
the law to be reckless?
(h) It is true, that DTB Uganda and DTB Kenya engaged in a syndicated
loan transaction with our Clients but it is not true that the judgement declared syndicated loans to be illegal.
(i) As can be seen from the above, the judgement declared the syndicated
loan involving DTB Kenya to be illegal because it did not obtain
permission from Bank of Uganda as required by the FIA to conduct
Financial Institutions business in Uganda.
(j) Is the UBA trying to push for the deregulation of foreign lending in
Uganda by vehemently protesting a court judgement which seeks to
enforce the regulation of such foreign lending? Is UBA trying to promote
illicit financial inflows and anarchy in the financial sector?
(k)The implication which should be derived from the judgement is that any
Bank which desires to conduct syndicated loan transactions in Uganda is
allowed to do so provided it comes under the regulation of the law.
(l) This is the message which the UBA should be passing on to its
members and the foreign lenders who want to participate in the lucrative
syndicated loan market in Uganda instead of alarming them that the Court
has banned syndicated loans in Uganda.
(m) It would appear to us that the UBA has felt the shock waves of the
judgement because the judgement exposes the hitherto undisclosed
foreign loans which have been escaping regulatory oversight by the
Central Bank of Uganda and which are otherwise eligible for taxation by
the Uganda Revenue Authority.
(n) Can the UBA give an account of all taxes payable to the Ugandan
treasury against interest payments remitted on the syndicated loan
portfolio which you have reported to now stand at UGX 5.7 trillion?
(0) There is no reason why the Government of Uganda which is a
sovereign juridical person should be blackmailed and taken hostage in its
own sovereign jurisdiction just because it is the largest beneficiary of
syndicated lending for various projects.
(p)The Government of Uganda has a corresponding duty to respect,
protect and apply the laws of Uganda equally to itself and all players in the
Banking sector, irrespective of whether they are local or foreign lenders.
(q)There is no country in the world which doesn’t regulate syndicated loan
transactions involving foreign banks or lenders. The High Court judgement
has ensured that Uganda takes its place as a responsible member of the
global financial community by adopting and adhering to international
lending best practice. Why should any well intentioned and patriotic
Ugandan oppose such a noble cause?
(r)The UBA should have applauded the Courts’ ruIing/judgement for
directing the Bank of Uganda to carry out its public duty and enforce the
law to regulate foreign lendinq transactions by foreign Banks. Does the
UBA believe that Banking Sector in Uganda can develop without the
enforced prudential regulation by the Central Bank?
(s) Until the judgement/ruling of the High Court is appealed and set
aside, the UBA and its officers will do better to stop undermining the
administration of justice and independence of the Courts in Uganda
through misguided media releases.
(t) If the UBA and its officers do not desist from this inappropriate
behavior, they will be cited for committing offences against judicial
proceedings pursuant to S. 107 Penal Code Act Cop 120.
(u)We hope this letter has put our Clients’ case in clear perspective and
that it has also clarified that the Court ruling did not outlaw foreign
syndicated lending transactions in Uganda.
(v) In the premise, we also expect that the UBA will be advised to follow
the available judicial due process to say anything if at all, within the
confines of the law.

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