Recently, this website broke a story on how Bank of Uganda (BoU) wrote to the Supreme Court seeking permission to withdraw an appeal they had filed on June 23rd, 2020, against businessman Sudhir Ruparelia contesting Justice David Wangutusi’s 2019 ruling, in which he declared that BoU illegally wound up Crane Bank and sold it to DFCU bank under dubious circumstances.
As Supreme court is set to deliver its ruling on that application, money mogul Sudhir Ruparelia has revealed that he is ready to block the BoU’s ‘deal’ to withdraw appeal insisting that the case must either continue or Court should compel them to pay costs.
Dr Sudhir contends that troubled BoU is trying to run away from the appeal as they are tactfully running away from paying Court costs.
“BoU is saying Crane Bank in receivership should pay costs, but remember Crane Bank ceased to be in receivership and went back to its shareholders, so when you say Crane Bank should pay costs, BoU is simply saying that we should pay our selves yet it’s them (BoU) who took us to court and lost in all the two lower courts before they ran to supreme court. So now they don’t want to pay the Costs,” Sudhir told the press.
How It Started
BoU /Crane Bank in Receivership had sued Sudhir and Meera Investments Limited for allegedly fleecing Crane Bank Limited (CBL) of Shs397 billion which the Central bank wanted to be refunded.
What About Previous Rulings?
According to previous court rulings, BoU said that the decision of shutting Crane Bank was necessary upon discovering that it had significant and increasing liquidity problems that could not be resolved without the Central Bank’s intervention, given that Crane Bank had failed to obtain credit from anywhere else.
“An inventory by external auditors found that the assets of Crane Bank were significantly less than its liabilities. In order to protect the financial system and prevent loss to the depositors of Crane Bank, Bank of Uganda had to spend public funds to pay Crane Bank’s depositors,” Mutebile said then.
However, tycoon Sudhir denied the allegation thus counter-suing BoU, seeking compensation of $8m (Shs 28 billion) in damages for breach of contract.
He asked the High Court to dismiss the case arguing that the Central Bank overstepped its mandate in commencing court proceedings against him and his Meera Investments Company.
Presenting an objection against BoU, Sudhir through his lawyers Kampala Associated Advocates, told Justice Wangutusi that when dissolving a bank, BoU had three options including putting someone else in its management – what is termed as statutory management, receivership or liquidation.
Counsel Elison Karuhanga a lawyer at Kampala Associated Advocates, argued that however, BoU chose to go for receivership yet under the law, specifically only the manager and the liquidator of the said bank is mandated to file a suit and not a Receiver.
He further explained that BoU as a Receiver could only dissolve or sell Crane Bank within 12 months but not sue its managers.
Full Genesis Of The Case
On June 30, 2017, Crane Bank Limited (in Receivership) took Mr. Sudhir Ruparelia and his Meera Investments Ltd. to court for causing financial loss amounting to UGX 397 billion to Crane Bank in fraudulent transactions and land title transfers.
Crane Bank (in receivership) in its Civil Suit No. 493 of 2017 sought High Court to compel Mr. Ruparelia to pay back the US$80,000,000, US$9,270,172.00, US $ 3,560,000.00, US$990,000.00 and UGX 52,083,995.00 as compensation for breach of fiduciary duty.
While Hon. Justice Wangutusi dismissed the UGX397 billion case against Mr. Ruperalia on a technicality, alleging that Crane Bank (in Receivership) lost its powers to “sue” and to “be sued”, thus rendering its suit a nullity, Crane Bank (in Receivership) maintaining that receivership is a management situation, and hence no legal change as to the capacity of a company to sue and be sued.
