By Namuli Feliza
The Principal Judge, Dr.Flavian Zeija has stopped the payment of Shs120 billion by Diamond Trust Bank to city businessman, Hamis Kiggundu under his company, Ham Enterprises.
Last month, the Commercial Court in Kampala declared illegal, the loan that businessman Hamis Kiggundu of Ham Enterprises had acquired from Diamond Trust Bank (DTB) and directed that the bank refunds the Shs120 billion allegedly deducted from Ham Enterprises’ bank accounts and return the security given by Ham.
However, DTB filed an application seeking to have the orders of the Commercial Court halted until their appeal is heard and disposed of.
On Monday morning, the Principal Judge allowed the application, saying that the bank would suffer a great loss if the order is executed before the appeal is disposed of.
“This decision has far-reaching implications on the banking industry as far as it declares syndicated loans illegal. This calls for maintenance of the status quo to enable the court of appeal to inquiring into this illegality (syndicated loans) and either uphold the finding or reverse it,” Zeija ruled on Monday morning.
He said that if the application seeking to stay the execution of the Commercial Court orders is not granted, it would render the appeal by DTB a waste of time.
“There is a serious or imminent threat of execution of the order and if the application is not granted, the appeal would be rendered nugatory. If the mortgages (security) are released (by DTB), it presents a high risk as these titled can be transferred and defeats the only security the applicants (DTB) have against the respondents (Ham).”
The Principal Judge directed that all the orders of the Commercial Court are not executed until the case filed in the Court of Appeal is disposed of.