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Loan Syndication: Inside Shs 36bn DTB-Ham Loan Saga

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The legal battle between businessman Hamis Kiggundu alias Ham is accusing Diamond Trust Bank Uganda (DTBU) and DTBK (Kenya) over a Shs 36bn loan has taken a new twist with the former querying the legality of the loan process.

During this week’s joint scheduling in Court, a preliminary matter was raised by Ham whose lawyers filed a separate application for it.

The matter in this application is that the second Defendant, DTBK, was carrying out illegal banking business in Uganda by lending money to the first Plaintiff, Ham Enterprises.

They also state that the first Defendant, DTBU was “facilitating and abetting the illegal conduct” of Financial Banking Business in Uganda contrary to the Financial Institutions Act.

Kiggundu acquired the money in four tranches: $6.2m, $3.2m, $458,604 and sh2.8b from both DTB Uganda and DTB Kenya between February 2011 and September 2016.

The loans were consolidated later in 2018 and were to run for five years, ending August 23, 2023.

In a letter dated April 11, 2019 to DTB, Kiggundu admitted the debts and promised to repay them by selling off his complexes at Makerere.

According to documents filed in court by DTB, Kiggundu was issued with the required reminders and notice, but he still failed to pay.

The bank said it notified Ham that he would forfeit his commercial building and land at Kawuku, which he presented as collateral to get the loan, if he did not pay up.

The businessman defaulted on payment. When DTB decided to recover the money, Ham applied in court for a temporary injunction and also challenged the bank’s action.

Illegality

During the scheduling, Kiggundu introduced a new case arguing that the loan he was advanced by DTB Kenya was an illegality.

He said DTBK lacked the license to operate in Uganda.

However, Uganda Bankers Association (UBA) recently released a statement that hinted on loan syndication which is the process involving a group of lenders in funding various portions of a loan for a single borrower.

Loan syndication most often occurs when a borrower requires an amount too large for a single lender to provide or when the loan is outside the scope of a lender’s risk exposure levels.

“Financial markets provide other frameworks through which capital can be mobilized including through the stock exchange and numerous players exist in this space depending on the level of development and attractiveness of the market,” said UBA Executive Director, Wilbrod Owor.

“So commercial banks are just part of a wider financial eco-system and may not necessarily always address every single need and requirement of the market for the simple reason that they are not designed to do so. Development Banks play a big role in long term development finance and these are typically owned by government and institutional long-term investors,” he emphasised.

The issue of raising funds from Kenya wasn’t the material case from the beginning.

Kiggundu hadn’t raised any issue about this. It was introduced by his new lawyers in the amended plaint.

The lawyers insisted that it’s a very important matter and should be a pretrial issue hence the new application filed.

UBA said banks in Uganda like any other market are part of a global financial web that benefits from international flow of skill, technology, standards and capital among others.

“Limiting financial institutions to indigenous resources be it human or capital would work against growth and development of an economy not to mention the risk it puts on Ugandans abroad and overseas who equally provide and share skills, mobilize resources and deploy themselves for the good of the institutions and geography within which they work,” he said, without necessarily quoting the DTB case.

Lawyer protests

During the court session, DTB’s lawyer Kiryowa Kiwanuka, said Kiggundu had not filed his new application in Court and only sent a soft copy to the defence lawyers.

Kiyowa (C) makes consultations during the scheduling of the case

Court directed Kiggundu’s team to serve the Bank lawyers by September 7. Kiryowa is expected to respond by September 14 and rejoinder by September 21.

The submissions will be filed in Court by September 28, 2020.

The ruling in this matter will be granted on October 5, 2020 and the hearing is set to also begin on the same day.

The Scheduling also discussed on the agreed issues, disagreed issues, documents to be relied on in the trial as well as the witnesses to be called upon.

The Court Ordered also ordered for the Institute of Certified Public Accountants to appoint an Independent Auditor to review the accounts and do an Audit/ Reconciliation at a cost to be shared between the parties 50/50 and present the report to Court.



Source – chimpreports.com

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Opposition sidelined as Benin votes in presidential election | Elections News

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With most rivals in exile or sidelined, Benin’s President Patrice Talon looks set to win a second term in office.

Voters in Benin are set to cast their ballots in a presidential election on Sunday, days after deadly protests against President Patrice Talon, who is heavily favoured to win a second term.

Talon, a cotton magnate first elected in 2016, faces off against two little-known rivals, Alassane Soumanou and Corentin Kohoue.

Opponents accuse the 62-year-old Talon of undermining Benin’s vibrant multi-party democracy by sidelining most of his main opponents.

Protests in several cities last week turned violent. At least two people died in the central city of Save when troops on Thursday fired tear gas and live rounds to break up protesters who had blocked a major highway. Five others were wounded.

In the commercial capital Cotonou, several people said they feared violence on election day.

“The events of these last days scare me,” said Christophe Dossou, a student. “I prefer to remain cautious.”

Benin’s President Patrice Talon denies targeting his opponents [File: Philippe Wojazer/Reuters]

Among the protesters’ complaints are Talon’s U-turn on a pledge he made as a candidate in 2016 to serve only one term, and changes he pushed through to election laws that he said were aimed at streamlining unwieldy government institutions. In practice, those reforms resulted in total control of parliament by Talon’s supporters and the exclusion of leading opponents from the presidential race.

One opposition leader Reckya Madougou was detained last month on accusations of plotting to disrupt the election, a charge her lawyer says is fabricated.

A judge from a special economic crimes court created by Talon also fled the country last week after denouncing political pressure to make rulings against the president’s critics, including the decision to detain Madougou.

Meanwhile, businessman Sebastien Ajavon, who came third in the 2016 presidential poll, was convicted of drug trafficking in 2018 and sentenced to 20 years in prison, while another potential rival, ex-finance minister Komi Koutche, was sentenced to 20 years in prison for embezzlement. Ajavon lives in exile in France, while Koutche lives in Washington, DC.

Talon denies targeting his opponents.

He has campaigned on his economic record, which includes improvements to key infrastructure such as roads, water and energy supplies.

Soldiers stand in line to block supporters of the incumbent president during an electoral campaign rally at Abomey-Calavi, on April 9, 2021 [Pius Utomi Ekpei/ AFP]

Benin, a country of about 12 million people, became Africa’s top cotton exporter in 2018 and recorded average annual gross domestic product growth of over 5 percent before the global economic downturn caused by the coronavirus pandemic.

“What we did was not easy,” Talon said at one of his final campaign rallies on Friday. “We are strong and we know how to get it done.”

He said he expects a “knock-out victory” for which there would be no need for a runoff vote.

The United States, German, French and Dutch embassies as well as the European Union delegation in Benin all called on Friday for calm and for the vote to go ahead in a free and transparent manner.

“We urge all parties to express their perspectives peacefully,” US State Department spokesman Ned Price told reporters. “We urge the electoral institutions and courts overseeing these processes and verifying these results to ensure these elections are conducted freely, fairly, and transparently.”

Results are expected to be announced on Monday or Tuesday.



Source – www.aljazeera.com

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Trucks Traveling to Juba Get Military Escort

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Government of Southern Sudan has agreed to provide full military security and safety to all road users including Ugandan cargo truck drivers plying Juba – Nimule highway starting this week.

This was reached during a meeting between South Sudan government and Ugandan authorities on Friday at Elegu One-stop Border point in Amuru district, Northern Uganda.

High level security officials from both countries met to deliberate on the deteriorating security along major highways in South Sudan in which eight Ugandan truck drivers have been shot dead by armed men in the past weeks.

The Sudanese high-level delegation was led by the country’s Chief of Defense Forces, Gen. Johnson Juma, Inspector General of Police, Gen. Majak Akech, and Director-General of Internal Security, Gen. Akol Khor.

The Deputy Commissioner General of the National Revenue Authority, Hon. Africano Mande was also present and four East African Ambassadors.

On the other side, Uganda’s delegation was led by Police Operations Director AIGP Edward Ochom, Director Crime Intelligence Col. Damulira among others high ranking officers.

“We have successively concluded our two days meetings with Ugandan authorities including the drivers who later agreed to resume the normal operation,” said South Sudan authorities.

“And as government, we assure them of full security on the major highways in the Republic of South Sudan and removal of the illegal road blocks and check-points for easy movement of trucks to Juba and others towns within the country.”

Last week, truck drivers from across the East African region protested the increasing insecurity in South Sudan, illegal taxes and also demanded for compensation of their deceased colleagues.

They parked their trucks at Elegu border and demanded for both governments to intervene before the situation deteriorates further.

In regards to compensation, Sudanese authorities agreed to pay for the victims but said that the process will be discussed through the foreign ministries of the two countries.

Although traders had also requested Ugandan authorities and in this case the UPDF to escort their goods to South Sudan, Lt.Col Deo Akiki said that “this can’t be a decision of UPDF. South Sudan is a sovereign State, therefore anything done on its territory at the moment has to be a bilateral matter beyond the two forces. It’s a government to government affair.”

ChimpReports understands that some trucks on Saturday left Elegu border for Juba under full security escort.

The post Trucks Traveling to Juba Get Military Escort first appeared on ChimpReports.



Source – chimpreports.com

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21 workers trapped in flooded mine in China’s Xinjiang | China News

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CCTV says rescuers have located 12 of the 21 trapped miners.

Eight miners have been rescued and 21 remain trapped in a coal mine in China’s Xinjiang region after flooding cut power underground and disrupted communications, according to state media.

The accident happened in Fengyuan coal mine in Hutubi County on Saturday evening, when staff were upgrading the site, the official Xinhua news agency said.

Rescuers had located 12 of the 21 trapped miners, broadcaster CCTV said, but it was unclear if they were all together.

Rescue personnel were trying to pump water from the flooded shaft and have been piping air into the mine.

Pipes were being laid but the pumping operation was going to be challenging, CCTV said.

Mining accidents are common in China, where the industry has a poor safety record and enforcement of regulations is often lax.

In January, 22 workers were trapped in a mine in east China’s Shandong province after an explosion damaged the entrance, leaving workers stuck underground for about two weeks.

Eleven men were pulled out alive, 10 died and one miner remained unaccounted for.

In December, 23 miners died after being trapped underground in the southwest city of Chongqing – just months after 16 others died from carbon monoxide poisoning at another coal mine in the city.



Source – www.aljazeera.com

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