Is Depositors Money Really Safe with Diamond Trust Bank?
Diamond Trust Bank (Uganda) is on its death bed. This website has learnt from reliable sources that the bank could be shut down following a series of scandals related to fraud. The bank has more than once been found on the wrong side of law; defrauding its customers. The most recent scandal that is threatening the bank’s existence is a case in court in which the bank is accused of illegally withdrawing 100bn from a several accounts belonging to Ham Enterprises. The money was withdrawn over a period of time without the customers consent. This had led to a legal battle, one that had led to scrutiny of the all the bank’s activities.
It has been established that Ham Enterprises is not the only customer whose money has illegally been withdrawn.
Many customers have been emerging with similar complaints, albeit some are quelled before they are in court. Another prominent case is of Francis and Stella Nekuusa who dragged the bank to court circa 2017 for allegedly depositing over an Sh10bn ‘loan’ on their account without their consent and later trying to take their properties on account that the couple had failed to pay a loan. The couple accused the bank of fraud.
In the event of its closure, customers who are currently maintaining accounts in the bank will lose their money because DTB is a foreign bank without big assets here in Uganda. It will go without leaving a trace.
The bank has been struggling for many years to survive without success. In 2019, it was named among the worst banks in Uganda.
In 2016, Bank of Uganda nearly took it over or close it due to undercapitalization.
As of today, the bank is currently operating largely on customers’ deposits with its total assets valued at about UGX1.606 trillion (approximately US$438.574 million) with customers’ deposits making up UGX 1.200 trillion of that value. That means the bank only has equity of four hundred six billion.
One wonders whether DTB has taken to defrauding its customers to facilitate its survival.
Bank of Uganda Governor Emmanuel Mutebile once hinted that two banks in Uganda were on close watch.
DTB is said to have been top on the list. With the ongoing scandals, BOU is said to be reviewing is its position to take over the bank or shut it down.
A report previously showed that all commercial banks in Uganda were operating above the minimum capital of Shs25b, except Diamond Trust Bank, which was below par.
Kenya fraud and Laundering
In 2018, DTB Kenya, was mentioned as a conduit to siphon funds from Imperial Bank. This led to the collapse of Imperial Bank, DTB then expressed interest to take over the bank.
But DTB’s interest in Imperial Bank was not that of an ordinary investor. For the bank had a lot to hide in its past dirty dealings with Imperial Bank depositors funds which eventually led to the collapsed bank being placed under receivership.
In fact, the role of DTB in the collapse of Imperial Bank came-in under sharp focus following its high powered push to acquire the collapsed bank then .
A forensic audit commissioned by Imperial Bank non executive directors shortly after the death of former group managing director Abdulmalek Janmohammed showed that DTB was one of the two banks that both Janmohammed and his co-conspirators used to move the bank’s funds in the KSh34 billion (UGX 1.2Trillion) fraud.
Data gathered by the forensic auditing firm, FTI Consulting, showed that at the time of the collapse DTB held KShs408 million (UGX 14.7 Billion) that had been fraudulently moved from Imperial Bank by directors of W.E Tilley (Muthaiga) Ltd, the co-conspirators in the fraud.
Further information showed that DTB was used by the directors of W.E Tilley to lauder proceeds of the fraud.
For example, five months before Imperial Bank was placed under receivership, DTB received a KShs4 billion (UGX 144.5Billion) transfer from the Emirates National Bank of Dubai into the account of one of the directors of W.E Tilley, Firoze Haiderali Jessa.
Ordinarily, such huge transfers are supposed to be reported to Kenya’s Financial Reporting Centre (FRC) which scrutinises sources to prevent laundering of funds from drugs and terrorism in the country. However, there was no evidence to show that this huge transaction was ever reported to FRC, which was a real act of Money Laundering
A trail of the fraud transactions shows that architects of the fraud moved funds in circular motions from Imperial Bank to both DTB and Fidelity Bank (now SBM Kenya) from where funds would be either be withdrawn in cash or wired to foreign bank accounts owned by W.E Tilley directors or Janmohammed and then back to Nairobi.
Similar Cases in Kenya
KSh 150 million mysteriously vanishes from South Korean tycoon’s Diamond Trust Bank accounts
Among very many Kenyan cases: In 2018, A South Korean investor sued DTB (Kenya) for liquidating and withdrawing KSh150 million (5.4Bn UGX) in two fixed deposit accounts without her approval using forged documents.
The investor, Sun Pil Lim, who is the wife of the President of Safari Park Hotel and Casino, Young K Roh, filed two cases against Diamond Trust Bank Kenya Limited, demanding her money back.
In the first case, Sun who is the chairperson of Daehan Pharmaceutical Limited, lodged a case at the High Court’s Commercial and Admiralty Division on September 14, seeking to recover the Sh100 million it had put in a fixed deposit.
His company was supposed to import drugs and other medical devices from Korea and sell them in the country.
After incorporation, the company opened an account with DTB, Thika Road Mall branch, on May 19, 2015 and wired KSh100 million (3.6Bn UGX) on October 24, 2015, with instructions that the money be put in a fixed deposit account after being promised an interest of 16 per cent.
On October 28, 2015, the bank issued three certificates of deposits for the cash, which had been deposited in tranches of KSh40 million (1.45Bn UGX) and two others of Sh30 (1.1Bn UGX) million each.
His money vanished from the account through illegal withdrawal.
Audit Recommended
If the bank has been able to defraud its big customers, analysts recommend that even small time customers, who have maintain loan accounts are advised to carry out audits of their accounts to ascertain whether they have not fallen victim yet.
Even those who save as low as 5000shs should check their accounts as this money could already have been withdrawn by the bank.
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