INVESTIGATIONS

How huge loans by politicians, tycoons sank Crane Bank

Former Crane Bank head office on Kampala Road.

A list of politicians and businessmen with huge loans in the defunct Crane Bank has been revealed, an indication of the bank’s eventual collapse and takeover.

The bank, formerly owned by Sudhir Ruparelia, was taken over by Bank of Uganda and eventually sold to dfcu Bank for being undercapitalized.

But now emerging evidence used by then BoU lawyers David Mpanga and Masembe Kanyerezi as contained in court affidavits shows a list of more than 30 prominent firms and individuals who were struggling to pay back their loans worth billions to the defunct Crane Bank, a reason it may have run bankrupt.

Among the prominent politicians is Foreign Affairs minister, Sam Kuteesa, who was yet to clear his Shs1 billion loan, Robert Mwesigwa Rukaari, an NRM supporter and businessman, owed the bank Shs2.2 billion, while veteran journalist Andrew Mwenda had an outstanding Shs256 million debt. Former ICT Minister John Nasasira had an outstanding balance of Shs400m. Vision Group Chief Executive Officer Robert Kabushenga had an unpaid balance of Shs 176m.

Former ISO Director Ronnie Balya had an outstanding balance of Shs562m while Mukesh Shukla of Shumuk Group of Companies was yet to clear a loan of Shs2b. ISO had also acquired a loan worth Shs1.7 billion from the bank by the time it was placed under receivership.

Robert Kabonero, the owner of major casinos in town and a string of other businesses, had a loan of Shs2b from the bank while Patrick Bitature’ Simba Telecom had an outstanding loan amount of Shs12b.

Spencon, a major road construction firm, had an outstanding loan balance of Shs22b while Grapes Limited, which is owned by Amina Moghe Hersi had an unpaid balance of Shs11billion.

Imperial Botanical Beach Hotel had also acquired a $4.3m (Shs 15b) loan facility from Crane Bank while Fountain Publishers, owned by James Tumusiime, also had an outstanding balance of Shs1.4b. BlueWave Beverages, producers of Bluewave mineral water, had an outstanding balance of Shs833m.

Kuku Foods also had a loan facility of Shs500m from Crane Bank.

Goodra Behakanira Tumusiime Bwebajja, the owner of Bwebajja Hotel Complex along Entebbe Road had an outstanding loan balance of Shs6.9b. Steel and Tube Industries had also acquired a loan of Shs6b.

In exercise of its powers under Section 87(3), 88(1)(a) & (b) of the Financial Institutions Act 2004, Bank of Uganda on October 20, 2016, took over the management of Crane Bank Limited.

Crane Bank was Uganda’s fourth-largest commercial bank by the time of its dramatic collapse.

The central bank sold some of its assets and liabilities to dfcu Bank, but remained with the other liabilities the buyer could not take.

The plaint filed against Crane Bank and its owners by then BoU lawyers David Mpanga and Masembe Kanyerezi, shows how the financial institution kept hundreds of businesses in operation while others struggled to pay back.

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