Summons against DTB directors withdrawn

Court has withdrawn criminal summons that had been issued against His Highness the Aga Khan and four other Diamond Trust Bank (DTB) directors. 

In an application filed before the Buganda Road Chief Magistrates Court, businessman Hamis Kiggundu, who owns Ham Enterprises had asked court to summon DTB directors to answer criminal charges arising from a complainant he had filed. 

In his application, Mr Kiggundu had accused His Highness the Aga Khan, Prince Karim Al-Husayn Shah, Mr Nasim Mohammed Devji, Mr Varghese Thambi and Mr John Sitakange of assisting the execution of several illegal transactions on his accounts in DBT held under Ham Enterprises, Kiggs International and Hamis Kiggundu. 

However, acting through K&K Advocates, DTB had argued that the application was irregular since the same matters had already been instituted before the High Court and Supreme Court, noting that the summons were issued without full knowledge of facts.  

“We note that this information that the matters are before the High Court and the Supreme Court was deliberately not disclosed in the complaint before oath and as such the criminal summons must have been issued without full knowledge of the relevant facts,” a September 15 letter by K&K Advocates and addressed to the Chief Magistrate Buganda Road Court, reads in part.  

Subsequently, on September 15 , Grade 1 Magistrate Valerian Tuhimbise informed Mr Kiggundu that the criminal proceedings had been taken over by the Director of Public Prosecution pursuant to article 120 (3) of the Constitution. 

“The purpose of this letter, therefore is to inform you that criminal summons which were issued in this matter [on September 13, 2021] are consequently withdrawn,” the letter reads in part.    

The summons had come in the wake of a ruling by the Court of Appeal on May 5 in which it quashed an earlier ruling by the High Court, which had awarded Mr Kiggundu damages. 

DTB had filed an appeal against the ruling arguing that Mr Kiggundu had on various occasions, borrowed money from DTB Uganda and DTB Kenya and had defaulted on the loan repayments even after frequent reminders to meet his obligations.

In a ruling delivered in October last year, Justice Henry Peter Adonyo had ruled that DTB Uganda had provided an illegal cover for DBT Kenya to conduct money laundering by providing financial services in a jurisdiction it was not registered.

However, the ruling which had sent shockwaves in the entire banking sector enlisted a hostile reaction from Uganda Bankers Association (UBA), which at the time described the ruling a “reckless judgment” that had put a portfolio of Shs5.7 trillion ($1.53b) held in syndicated loans at risk.