KAMPALA – The Chief Executive Officer of Arise Holdings Ltd, which is DFCU Bank’s biggest shareholder, has finally resigned from the bank’s board of directors.
According to an internal memo, Mr Malik ceased being a member of the board on September 21, 2018, confirming earlier reports that the bank, which has been a subject of controversy ever since they took over assets of Crane Bank a year or so ago, continues to revel in problems post-takeover.
“The board of directors of Dfcu (the company) informs its shareholders and the general public of the resignation of Mr Malik as a director in the company with effect from the 21st of September 2018. Mr Malik joined the board in November 2007 as an independent director and resigns due to increased professional commitments following his appointment as the Chief Executive Officer of AriseBV, the majority shareholder in the company,” reads the notice served through an advocate.
Mr Deepak Malik’s resignation, issued in a letter to the DFCU board three months ago, came in the aftermath of pulling out of the bank by the Commonwealth Development Corporation (CDC), Britain’s oldest development finance institution.
Arise Holdings has 58 percent shares while CDC is DFCU’s oldest investor after jointly setting up the bank with the Government of Uganda in 1964. CDC’s move comes in the aftermath of the fall out from her partner’s takeover of Crane Bank with the transaction attracting industry scrutiny over transparency issues and it’s European shareholders in the spotlight. The Auditor General has since issued a damning report against the transaction flagging it untransparent.
The CDC on June 14, notified the DFCU Board and other shareholders that they would sell their stake.
CDC’s Investment Director Irina Grigorenko said it was “undertaking a review of its investment in DFCU Limited which may lead to the disposal or some of some or all of its shares in DFCU over the short to medium term.”
The CDC exit is a major industry blow for the DFCU has been precipitated by the bank’s controversial acquisition of Crane Bank Ltd. It is said that after Crane Bank Ltd shareholders protested the takeover of branches by DFCU, it unsettled the board after CBL insisted that branches weren’t part of the bank as they fall under Meera Investments Ltd. CDC and two other partners opposed the deal and accused DFCU bosses especially the Managing Director Mr Juma Kisaame for not carrying out enough due diligence. The British investor later acted by quitting the relationship.
DFCU has in recent months been battling former Crane Bank shareholders over property worth millions of dollars.
The dfcu bank acquired Crane Bank, the then 4th largest bank on February 27, 2017, at a fee later to be discovered as a paltry Shs 200 billion. However Former Crane Bank shareholders led by majority shareholder Sudhir Ruparelia and family have dragged the Bank of Uganda (BoU) to court, claiming their bank was sold to dfcu without considering their interests in accordance with the Financial Institutions Act.