KAMPALA — Bank of Uganda (BoU) could pay upto 110 billion as the battle with city tycoon Sudhir Ruparelia in the aftermath of the closure of Crane Bank Ltd rages.
Justice David Wangutusi of Commercial Court on Monday this week dismissed a case in which BoU claimed that tycoon Sudhir Ruparelia and his Meera Investments Ltd fleeced his own Crane Bank Ltd (now in receivership) of UGX397 billion.
Bank of Uganda, through their new attorney Dr. Joseph Byamugisha of Byamugisha & Co Ltd have since chosen to file an appeal, but according to legal experts, with the Central Bank condemned to legal costs for a case before the High Court, ate at least is five percent of the decretal sum , the BoU is expected to compensate Sudhir with at least UGX. 19b and his Meera Investments Ltd would also claim another UGX. 19b, with the whole bill expected at 36b.
With the decision to appeal the ruling, should the Central Bank lose at the Court of Appeal, they would be condemned at 10 percent cots of the appeal. A quick calculation buts the whole figure at atleast UGX. 110 billion.
In his 22-page ruling that was delivered by the court’s deputy registrar, Mr Festo Nsenga on Monday, Justice Wangutusi noted that at the time BoU and Crane Bank (in receivership) filed the suit against Mr Ruparelia and his Meera Investments in January 2017, Crane Bank was a non-existing entity, having been terminated when the Central Bank sold its assets to DFCU Bank in October 2016.
The judge ruled that this rendered Crane Bank in receivership incapable of suing or being sued since there would be no assets to be claimed for.
Court noted that the public notice made it clear that BoU as the receiver had done an evaluation of the respondent (Crane Bank in receivership) and arranged for the purchase of its assets and assumption of its liabilities by another financial institution.
“In his [BoU] notice, he specifically stated that the liabilities of the respondent had been transferred to DFCU Bank Ltd and that because DFCU Bank had taken over the liabilities, it would, by way of consideration, be paid by conveying to it the respondent’s assets,” the judge ruled.
The judge noted that in so doing, the Central Bank had not only fulfilled Section 95(1)(b) of the Financial Institutions Act but had in a way also sold the respondent, albeit that the payment was in kind, by way of exchange of liabilities for assets.
While awarding costs of the suit, the court ruled that under such circumstances, the party to bear the costs must be the one who brought the matter to court and at the time of filing the suit, BoU had taken over management of Crane Bank Ltd.