OP ED: Unlike Sudhir success vs BoU, DFCU; Ham Kiggundu’s court battle with DTB isn’t going anywhere

Uganda’s banking sector has been treated to court battles which have affected public opinion. The main actors included the banking father himself, Bank of Uganda, as well as other players such as DFCU, DTB, Equity bank – etc. The battles have had real impact on rules governing the banking game in the country – BoU […] The post OP ED: Unlike Sudhir success vs BoU, DFCU; Ham Kiggundu’s court battle with DTB isn’t going anywhere appeared first on Watchdog Uganda.

OP ED: Unlike Sudhir success vs BoU, DFCU; Ham Kiggundu’s court battle with DTB isn’t going anywhere

Uganda’s banking sector has been treated to court battles which have affected public opinion.

The main actors included the banking father himself, Bank of Uganda, as well as other players such as DFCU, DTB, Equity bank – etc.

The battles have had real impact on rules governing the banking game in the country – BoU especially will never be the same again.

Key characters including billionaires Sudhir Ruparelia will for a long time be remembered for making big sacrifices to cause reforms in the running of the Bank of Uganda. Many analysts agree these reforms are for good – and will reduce impunity in the way workers of the central bank transact business.

Then, there is Ham Kiggundu and Peter Kamya the former owner of Simbamanyo now Gender and Labour House. There is a way they want to use courts to disrupt the banking business the way we know it.

Ham’s argument is persuasive especially when he appeals to nationalistic tendencies but the theory and practice of banking are against him. And he has no allies among bankers or the larger financial sector. Only business people who borrow and fail to pay and have lost properties such as Peter Kamya can cheer Ham on.

And before we know it, the bankers association has branded Ham a man who doesn’t want to pay his loan obligations and using courts to delay the process – meanwhile, he is making long speeches to bias the public against real issues in customer relationship with DTB.

However, this has not stopped people debate the pros and cons of these cases.

To bring you up to speed – this is how I can explain the cases. Billionaire Sudhir Ruparelia lost his bank, Crane to DFCU bank with the help of Bank of Uganda. He not only lost the bank – but the central bank also wanted to donate his property housing the bank to the new owner. The property was owned by Sudhir’s other company, Meera Investments.

The Bank of Uganda didn’t stop there – they also wanted Sudhir to pay sh397billion which the Central Bank claims it injected in the bank as it took over which Sudhir contested. BoU had also been robbed of Meera buildings which housed Crane bank branches across the country prior to its closure.

This is in simple terms what has been at the center of the court battles.

As for Ham Kiggundu. He was a client of DTB and took loans from the bank to service his growing business empire. At some point, Ham claims he found out the bank had deducted more money than it ought to. The bank however says Ham was playing games because he does not want to pay back the money he borrowed from the bank. Ham borrowed money from DTB Uganda and the sister bank in Kenya. When the two failed to agree, Ham went to court and challenged the bank’s legality in giving him money outside its jurisdictions. He says the money DTB Kenya gave him was done illegally.

In looking at the two causes the billionaires are squaring off with banks, there is unfortunately a misunderstanding in the central premise.

I also agree with the banking association for backing their member DTB because what the bank is doing with Ham is normal practice in the sector – save for the claim that DTB deducted Ham’s money wrongly is unforgivable. That should be rectified if he has evidence.

That is why I believe comparing Sudhir and Ham’s causes – is comparing apples and tomatoes.

When recently Bank of Uganda took the bold stand to withdraw its case against Sudhir Ruparelia and his property company, following the closure of his Crane Bank, there has been talking that Ham Kiggundu too would get Diamond Trust Bank (DTB) settle with him out of court.

It is not possible. I would have supported Ham if he was focused on redeeming illegal transactions on his accounts. The case of challenging ownership of banks and how business in the banks is done is misadvised, he will not get anything out of it.

That is why the banking association has united against Mr. Kiggundu because his case has serious repercussions on their business. It will make every Tom and Dick who don’t want to pay back loans claim one thing after the other to avoid their responsibility.

Note – The same association stayed out of Sudhir’s battle with DFCU over his properties under Meera Investments. DFCU had occupied Crane Bank branches on prompting of Bank of Uganda. DFCU later realized its mistake and returned the properties back to the Bank of Uganda. Peace and sanity returned to its halls.

There is a reason why the banking association was silent in the battle. Sudhir’s Battle was every bank owner’s bank. Sudhir’s fight was for every banker. Every bank has stakeholders who don’t want to lose their money or stake after the regulators close them down. He was fighting for the right to be heard of the entire banking sector in case their institutions experience challenges – which could happen to any banking institution.

Sudhir was the visible symbol of the banking industry’s fight despite the fact he singlehandedly fought to the end.

Certainly banks could not comment when Sudhir’s court battles became fierce against BoU and DFCU, however, in more than one way – this was the fight for the entire banking industry which I believe is right now being handled more responsibility by the regulator than was the case six years ago.

On the other hand – Ham has a false premise in his argument. He is accusing foreign banks of siphoning money from the economy.

The trials have culminated in the recent court ruling which stated that the Bank of Uganda could be sued – a complete turnaround from the earlier status of invulnerability – which gave its staff cover to carry out decisions which gravely affected others but remained untouchable.

The typical case was the closure of Crane Bank which the auditor general, parliament and courts found irregular, and particularly its former executive director in charge of commercial bank supervision acted unilaterally but with impunity while carrying out her mandate. There is return of sanity at the Central Bank – and certainly, the dust is likely to settle that the Bank of Uganda has decided to make peace with Sudhir Ruparelia.

Whereas Sudhir’s battle will not return his bank but it has altruistic objectives which serve Uganda and improve the banking sector moving forward. On the other hand, Ham is pursuing a completely selfish mission where he wants to get away from his responsibility of paying back what he borrowed. It is like someone who wants to get away with murder over the technicalities of the case.

The post OP ED: Unlike Sudhir success vs BoU, DFCU; Ham Kiggundu’s court battle with DTB isn’t going anywhere appeared first on Watchdog Uganda.