Coughing Sudhir’s Bank Is A Must & Stand Warned Not To Contempt Court Orders! Tycoon Lawyers Pump More Pressure On Staggering Bank Of Uganda

Also, the Supreme Court noted that the implication of the finding that the receivership of the Appellant had ended was that the management of the Appellant reverted to the shareholders after the 20th of January 2018.

But guess what! ‘shamefully’, Bank of Uganda officials instead of abiding by court ruling and save tax payers money that may continue to be wasted in this saga, has since issued a press release seemingly contesting Supreme Court’s ruling with a couple of ‘lamentation stories’ all in attempt of avoiding a heavy bill Sudhir is likely to slap them with.

Meanwhile, Sudhir’s lawyers of Kampala Associated Advocates (KAA) have come out and trashed BoU’s ‘controversial’ statement before warning it that let it play all games but finally they must abide Supreme Court’s ruling!

“We would like to inform the public that on 11 February 2022, the Supreme Court finally and conclusively determined the dispute between BOU and our clients.

The law firm says, “The effect of the Supreme Court decision is that the company has reverted to its shareholders. The decision also means that BOU lost control of CBL from the 20th of January, 2018 and any decision made on behalf of CBL by BOU is reversed. This is not a mere technicality. This is a fundamental principle- those in authority must act in accordance with the express provisions of the Law. BOU cannot exercise power outside or against the law nor is it above the law.”

The law firm further clarifies, “The statement by BOU that a review application is pending before the Court is incorrect. This review application arises from an appeal which was finaly determined by their own withdrawal. It therefore stands moot. Contrary to the assertions of BOU, the ruling of the court was within the ambit of the Financial Institutions Act. It was overtaken by events.”

KAA advocates says that the import of the Supreme Court decision is that BOU is also subject to the laws of Uganda and cannot act in a manner that places it beyond the reach of the law.

“BOU must act within the four corners of the laws of Uganda. Our Clients shall take all the necessary steps to ensure that BOU complies with the Orders of the Supreme Court, the Court of Appeal and the High Court of Uganda,” says the law firm in the press statement.

For starters, after dubious sale of tycoon Sudhir’s Bank assets to Dfcu, Bank of Uganda through Crane Bank (in receivership) filed a suit against Sudhir and Meera Investments seeking to recover over Shs400 billion and 48 land titles.

However, BoU’s case was dismissed by High Court with costs on grounds that a bank under receivership cannot sue. Infact, receivership had ended and Crane Bank was a non-citizen company which could not hold freehold titles.
“The 1st respondent was closed as a financial institution and placed under receivership. Upon closer, it ceased being a financial institution under the Act and it could therefore, not be progressed to liquidation. The 2nd respondent’s act therefore of moving the 1st respondent to liquidation are contrary to the above clear provisions of the law and the same cannot be sanctioned by this court,” states part of the ruling.

Because it was not satisfied, BoU filed an appeal to the Court of Appeal which didn’t waste its time but upheld the findings of the High Court thus pushing it to the Supreme Court that has today ruled in favor of Sudhir…just like previous court rulings.

You many actually remember that in all legal battles, Courts of law have been ordering Bank of Uganda to pay costs to Sudhir who has floored them multiple times.Hint On Previous Rulings

In 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,” BoU governor, late Tumusime Mutebile said then.

However, tycoon Sudhir denied the allegation thus counter-suing BoU, seeking compensation of $8m (Shs28 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.

To you our first time reader, all these stem from June 30, 2017, when 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 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 which ruling BoU disagreed with and instead kept on appealing till the last court losing at all levels to the tycoon.

Crane Bank started operations on 21 August 1995 “with a vision of being the largest privately owned Ugandan Bank.”

In September 2012, Crane Bank acquired the assets and some of the liabilities of the National Bank of Commerce, a small, indigenous, financial services provider in Uganda that had lost its banking license.

On 30 January 2014, Crane Bank established Crane Bank Rwanda Limited, a wholly owned subsidiary, with the first branch in Rwanda opening to customers on 30 June 2014.

Later, the Bank was closed by the Bank of Uganda on October 20, 2016, saying that it had failed to comply with a capital call on July 1, 2016. Back then, Central Bank Governor Emmanuel Tumusiime Mutebile said that the Bank takeover was guided by the systemic nature of the under-capitalized institution to avoid financial sector instability.

The bank was a large financial services provider in Uganda. As of 31 December 2015, Crane Bank’s assets were UGX:1.81 trillion, with shareholders’ equity of UGX:281.43 billion. In October 2015, it had more than 750,000 customers.