Home Bank Farud DTB on the Verge of Collapse following over 127 Bn Fraud Cases by Ham Enterprises, Gen Charles Angina, Yiga Musa & Others

DTB on the Verge of Collapse following over 127 Bn Fraud Cases by Ham Enterprises, Gen Charles Angina, Yiga Musa & Others

by Uganda Times

Diamond Trust Bank (Uganda) is on its death bed resulting from a series of fraud sandals.

This website has learnt from reliable sources that the bank could finally 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 over 120bn 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 The money was withdrawn over a period of time without the customers consent.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.

According the analysis, Ham Enterprises did not know about the bank’s fraud and dubious activities on its accounts until on the November 14th 2019, when the bank surprisingly, demanded unknown sums. This compelled the Company to carry out an audit on all its accounts in respect to all their previously settled and ongoing loan facilities with the Bank by then.

It was only after making this 10 year accounts audit findings that Ham Enterprises realized how DTB had over the years been unlawfully, fraudulently and irregularly without the company’s instructions debiting and recovering monies from Ham Enterprises accounts in breach of the their contractual obligations.

It has been established that Ham Enterprises is not the only customer whose money has illegally been withdrawn.

Other Cases in Uganda

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 (suit no.784/2016) who dragged the bank to court circa 2017 for performing a series of illegal transfers and debits amounting to a total loss of Sh10Billion on their account without their consent and later trying to fraudulently take their properties.

Gen Charles Angina also filed a case (suit no. 76/2018) in court after the bank took advantage of his busy schedule and committed a series of frauds on his accounts which included transferring his properties to third parties on allegations that he had defaulted and he lost UGX 1,800,000,000. On March 5 2021, Court ruled that Gen Angina Tittles be transferred back to his names and equally ordered the bank to pay the general 400,000,000 Ugx at an interest rate 10% as well as the bank paying legal costs for the suite.

Another customer named Yiga Musa (suit no.254/2017) filed a suit against the bank in 2016 after the bank took advantage of him not understanding and reading the English language. The bank made him sign many documents, including mortgages deeds with an intention of creating an illegal mortgage and making him a debtor and defrauded him of 3, 500,000, 000ugx.

Similar Cases in Kenya

Among very many Kenyan cases: In 2018, A South Korean investor sued DTB (Kenya) for liquidating and withdrawing KSh150 million (Ugx.4.5Bn) 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 KSh100 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 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 and two others of KSh30 million each.

His money vanished from the account through illegal withdrawal.

See More Cases

Kenya 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 has come under sharp focus following its high powered push to acquire the collapsed bank.

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 fraud.

Data gathered by the forensic auditing firm, FTI Consulting, showed that at the time of the collapse DTB held KSh408 million 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 KSh4 billion 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 is no evidence to show that this huge transaction was ever reported to FRC.

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.

(Ksh1 = 36.2Ugx)

See more Money Laundering Activities of Diamond Trust bank

Terrorism Links 

In 2019, Diamond Trust Bank group CEO Nasim Devji (Kenya) was arrested alongside other bank officials for aiding and abetting terrorism in Nairobi. Nasim was also in direct communication with the terrorists who raided the 14 Riverside complexes in Kenya. They held an account at Diamond Trust Bank’s East Leigh branch.

DTB Group CEO Nasim Devji at her Office before The Anti-terrorism Police Unit Arrest In 2019

The bank was on the spot for complacency in complying with banking regulations with Kenya DPP Haji revealing how investigations by the relevant agencies showed that the terrorists had been withdrawing large amounts to the tune of Ksh50M(About Ugx1.8Bn) prior to the attack million, transactions which were never reported to the Financial Reporting Centre (FRC).

The office of the DPP later charged and fined the Bank and its officials after it hushed the hefty withdrawals yet they ought to have alerted authorities when such withdrawals were made.

Haji, seemingly frustrated by the bank’s non-compliance alleged that the bank is a serial violator of banking regulations saying that Dtb had even declined to provide CCTV footage of withdrawals despite the bank insisting that it is complying with the government.

Director of Public Prosecutions (DPP) Noordin Haji said the money withdrawn from Diamond Trust Bank (DTB) Eastleigh branch was wired to Jilib town in Somalia, “which is the headquarters” of Al Shabaab militia and also to Syria to support the outlawed ISIS group.

Read also, DTB fined for Violating Tanzania Banking regulations

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 under-capitalization.

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.

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 for about 5 years 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.

Updated on March 6 2021

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