IS DEPOSITORS’ MONEY REALLY SAFE?
MISC.APPLICATION NO.34 & 35 OF 2020 Arising from CIVIL SUIT No.43 OF 2020
Ham Enterprises, one of the companies owned by prominent businessman Hamis Kiggundu. The company has dragged Diamond Trust Uganda to commercial court after the bank illegally and fraudulently debited over 100 billion UGX from its accounts over a period of 10 years.
In a letter dated, November 16, 2019 the company wrote to the bank in response to a letter written to them by the bank about unknown and unclear sums of money claimed to be owed to the bank by the company.
This compelled Ham Enterprises to carry out an audit of all its settled and pending facilities with the bank. “It was revealed that through extortionate, irregular, unlawful, deceptive transactions and in breach of contractual, fiduciary and statutory duties; the bank fraudulently through misrepresentation, irregularly debited and recovered monies from their accounts,” reads the letter in one part.
That through vigorous, deceptive, fraudulent, unscrupulous, under regulated, unfair, unjust schemes with use of their superior bargaining position contracted the company into unconscionable terms of contract, unjustly enriched themselves jointly and severely.
Through the letter, the company notified the bank that it had terminated all its contracts with the bank.
“That the actions of the bank in regard to their previous dealings had complicated, stifled and frustrated their contractual obligations and duties with Diamond Trust Uganda and Kenya all which amounted to breach of contract. The company thereby communicated termination of all existing contracts. Clearly stating that, as far as Ham Enterprises (U) Ltd is concerned; there was no indebtedness to the bank.”,
Without any denial as the bank clearly knew what they had done, this was later followed by another communication from the company dated January 10, 2020, where the company wrote a demand notice to Diamond Trust Bank (U) and Kenya for refund of their monies
The company clearly asking for the money fraudulently withdrawn from its accounts which is above and in excess with a total excess of 29,035, 682, 682 billion Ugandan shillings unlawfully debited from their shillings account and 22, 938, 582.29 Million United States Dollars debited from their Unites States Dollars accounts, reads the letter.
The company demanded for a full accounts figurative audit, account reconciliation and a detailed explanation on the same otherwise Ham Enterprises U Ltd requested that its money should be refunded to its accounts within five days from then and that its Certificates of Titles pledged as security be returned for as far as the company was concerned there is conclusive evidence that the bank had fully been paid and on top of which the bank had fraudulently withdrawn to a tune of 100 billion UGX from the company’s accounts. Failure of which leaves the company with no choice but to seek redress from the regulator or constitute legal action for remedies against Diamond Trust Bank Uganda/Diamond Trust Kenya for recovery of the company’s money.
This website gathers that the bank failed to refund money it stole from the company’s accounts which prompted them to sue the bank for recovery, costs and damages.
The scandal exposes the bank as an untrustworthy institution. Customers currently operating loan accounts in the bank might have to conduct thorough audits as their might be more of the same fraudulently debits being done by the bank. If a big client like Ham Enterprises who should be treasured can be cheated, it is likely that many more are falling victim.
DTB was top on our list of worst banks last year following a series of fraud scandals. The foreign owned bank has done a lot of harm than good to Uganda, falling back on what is expected of them. Rather than build, DTB has frustrated the economy of Uganda. The bank repatriates all profits made in Uganda.
Such foreign banks are the main reasons frustrating the development of our motherland Uganda. They come into this economy with very small capital of 50 – 100 billion shillings yet they operate balance books that are 10/15 times that amount meaning theses banks operate mainly n depositors capital which is mainly our money as Ugandans yet they repatriate all the profits bank to their home countries.
Diamond Trust Bank has a profile of 1.6 trillion in shareholders capital assets and liabilities yet close to 1.2 trillion is depositors’ cash, our money as Ugandans. We literally own theses banks as Ugandans yet they take all the profits. Ask yourself how many of shareholders for most of these foreign banks even stay or live in Uganda, they do not have the nation at heart, they only seat abroad waiting for dividends on their accounts, why should money made in Uganda be spent elsewhere only to leave we Ugandans in absolute poverty. Without control of our economy, this country shall never develop.
On top of operating on depositor’s capital which is our money, they invest very small capital of share holders’ capital that’s why these banks hold very low single borrowers limit obligations which is not good for the economy. Additionally on operating in our money as Ugandans, they have discriminable borrowing, they would easily borrow a foreign company compared to a Uganda under the disguise of corporate governance, yet they charge Ugandans very high steep interest rates moreover on our deposits given to us in form loans
The major reason Uganda and most African countries have failed to take off is because of exploitation from most of these foreign bodies, the like of banks, they come to our country in disguise of helping us, yet they are here to exploit. Other countries develop at the cost of our suffering and poverty.
If a big corporate entity like Ham Enterprises can be exploited and defrauded illegally to this magnitude, what of we smaller ordinary Ugandans that can barely survive. We who wake up every day to merely survive and hope to survive too the next day??
DTB was not started yesterday. It was started in 1945, initially as Diamond Jubilee Investment Trust (DJIT) initially operating as a community-based finance house, dedicated towards the extension of credit to the East African Ismail community and the mobilization of their savings. In 1965, DJIT was split into three entities, which occasioned the establishment of branches in the three East African countries; Uganda, Kenya and Tanzania.
In 1968, the rapid economic development of post-independence Uganda saw the founding of Diamond Trust Properties Uganda Limited. In 1972, Diamond Trust (Uganda) Limited (DTU) commenced operations as a non-bank financial institution.
It did not have a full banking license and could not accept deposits from the public. In 1997, the bank became a full-service commercial bank and was renamed Diamond Trust Bank (Uganda) Limited.
Twenty three years have since passed since it became a full-service bank, but its growth is still insignificant. In 2016, it survived being closed by Bank of Uganda due to undercapitalization. It was the second time the bank was threatened with closure. Between 1972 and the early 1990s, while it was still DTU, it was declining, albeit largely due to political instability.
Yet it has managed to sail through all those storms, endless fraud by the bank and the revelation that it is largely operating on customers’ deposit may sweep it to the ground. Customers will find it hard to trust the bank owing to the fact that it is a foreign bank that has whose shareholders have failed to invest or show development in Uganda. In the event that it closes shop, a foreign bank will go with customer deposits and assets without trace.
Even when the bank has been reported to have registered some profits, the bank reduced the amount of loans advanced to customers in 2018, to Shs534.18bn, from Shs623bn in 2017. The bank therefore repatriates a huge percentage of her profits without giving the benefit of loans to her customers who finance its operations.
It is plausible for one to believe that such foreign banks only milks from Ugandans and doesn’t facilitate progress as a bank should do. DTB was clearly not created to serve the interests of locals but Ismailis, it is not a Ugandan local bank, hence does not cater for the interests of the Ugandan locals.
We have so many people that have lived in Uganda for many generations including Indians: the likes of Sudhir that have got passion for this motherland at heart, look at the kind of investments that he has made in this country, we are literally proud of him.
DTB proprietors have worked in Uganda for many generations but have never considered Uganda a home, they don’t have the love for the nation at heart, they hold zero investments in Uganda and do not even live here, they only wait for dividends on their bank accounts abroad. How can a bank have been operational in our motherland Uganda for 74 years but still not even tits M.D owns a house in Uganda or lives in a bank owed house but they are still renting up to date. They are only here to exploit Uganda’s economy to Zero, since they take everything they make.
As Ugandans, we should push our government to pass a law that all Managing directors of all banks should be Ugandans.
They are now even stealing depositors’ money. How do we expect the economy to take off if we have such a huge load weight that is holding us back?, the kind of foreign banks and corporate entities that have not appreciated the beauty and the favors this nation has given them, if Uganda is to develop, we have to love our motherland if this nation is to prosper and we need to desist from those that want to take our nation down.
Without the love for our nation at heart, full economic financial independence with such foreign companies exploiting our nation at such a rate, our nation shall never prosper.
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