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Sudhir rubbishes BoU claims, objects to UGX 397b case

City tycoon, Sudhir Ruparelia with some of the members of his legal team – Kampala Associated Advocates-  recently. (PHOTO/PML Daily)

KAMPALA – City tycoon Sudhir Ruparelia has objected to the case in which the central bank sued him and rubbished claims that he allegedly fleeced his own bank of Shs397 billion in fraudulent transactions.

Mr Ruparelia through his lawyers of Kampala Associated Advocates on Wednesday, July 03, presented a preliminary objection against the Bank of Uganda (BOU) case before the Commercial Court judge David Wangutusi.

The lawyers asked the court to dismiss the BOU case arguing that it overstepped its mandate in filing the case.

“When dissolving a bank, BoU had three options. It can put someone in management in what is called statutory management, receivership or liquidation and it chose to go for receivership. Under the law, specifically, only the manager and the liquidator can sue. The case cannot be filed by a receiver,” said Mr Ellyson Karuhanga, one of the lawyers representing Mr Sudhir.

He explained that under the law, BOU has four functions to dissolve and not selling the financial institutions.

“The receiver cannot be sued on that act and cannot sue anyone. His action is protected by the law. The second point we are raising is that the receivership is limited by time, the law gives the receiver 12 months to carry out its function and after this, he cannot do anything,” Mr Karuhanga argued.

Sudhir speaks to his lawyers of Kampala Associated Advocates led by Mr. Peter Kabatsi during a previous court appearance (PHOTO/File)

According to Mr Karuhanga, BoU had 12 months within which to carry out the four functions which did not include suing.

“For us, a receivership, unlike the others, is not a siege, they are not surrounding the bank to find out what is happening. The law does not allow the company whose majority shareholder is a Mauritius based company to obtain those companies as is the case of crane bank,” he explained.

The lawyers made the objection when the case filed in January 2017 came up for hearing today.

Mr Bruce Musinguzi also argued that Mr Sudhir was no longer the majority owner of Crane Bank that he founded after Mr Rasik Kantaria, a Kenyan national, on December 6, 2010, snapped up 47 per cent of the bank’s shares.

He added that Mr Kantaria later transferred his shares to White Sapphire Ltd, a company incorporated in Mauritius and that a one Jitendera Sanghani, a British citizen, held 4 per cent stake in Crane Bank.

He also contends that under Uganda’s Constitution and the Land Act, Crane Bank in receivership could not own or hold freehold property and was, therefore, not capable of holding the suit property in its names.

However, in his response to the submissions of Sudhir’s lawyers, BoU through its lawyer Dr Joseph Byamugisha told the court that when a financial institution is placed under receivership the power to commerce or to continue with the civil suit does not stop.

Case:

BoU on January 25, 2017, placed Crane Bank under the receivership. Later that same year, the central bank alongside Crane Bank sued Mr Ruparelia and his Meera Investments Company for allegedly fleecing his own bank of Shs397b in fraudulent transactions. Mr Ruparelia denied the allegations and counter-sued BoU, seeking compensation of $8m (Shs28b) in damages for breach of contract.

Justice Wangutusi has set August 26, for the ruling.

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