KAMPALA – Justice David Wangutusi of the Commercial Court, will on Monday, August 26 morning decidethe case in which city tycoon Sudhir Ruparelia and his Meera Investment Ltd have asked court to dismiss allegations that he fleeced his own bank of Shs 397 billion.
The businessman, through his lawyers — Kampala Associated Advocates (KAA) raised an objection, rubbishing claims by the Central Bank, and cited a hoist of authorities faulting BoU.
Mr Ruparelia through his lawyers asked the court to dismiss the BOU case arguing that the central bank overstepped it’s mandate in filing the case.
Lawyer Elison Karuhanga of KAA argued that when dissolving a bank, BoU had three options — puting someone in management in what is called statutory management, receivership or liquidation.
“[The central bank]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 Karuhanga argued.
Sudhir’s lawyers faulted BoU for acting hurriedly and overstepping her mandate in hurriedly selling off the Bank to dfcu Bank, a deal that has since attracted criticism.
“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 his or her functions and after this, he cannot do anything,” Mr Karuhanga argued.
According to Mr Karuhanga, BoU had 12 months within which to carry out the four functions which did not include suing.
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 it’s names.
In response to the submissions of Sudhir’s lawyers, BoU through it”s 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.