KAMPALA – Lawyers representing city tycoon Sudhir Ruparelia have extensively presented their case asking a panel of the Supreme Court to compel the Bank of Uganda to settle costs of the longstanding legal dispute between the central bank and the businessman’s Meera Investments Ltd, and also return Crane Bank Ltd to the shareholders.
The BoU took over the management of Crane Bank Ltd in October 2016 and subsequently sold it dfcu Bank in January 2017. BoU and Crane Bank (in Receivership) then sued Mr. Sudhir and his Meera Investments, accusing them of siphoning Shs397b from the bank. BoU lost both in the Commercial Court and Court of Appeal which ordered BoU to pay costs. In September, the BoU subsequently withdraw their appeal all together, and the central bank’s lead team argues that they cannot cover the costs of the appeal.
Now, in substantial written submissions to the panel, Mr Sudhir’s lawyers argue that Crane Bank Ltd should even be returned to the shareholders.
The lawyers argue that the court should compel the Bank of Uganda to give back the assets of Crane Bank Limited to its original shareholders since its receivership ended in 2018.
The lawyers; Peter Kabatsi, Joseph Matsiko and Elison Karuhanga demand that BoU must not only return the bank to its shareholders but must also pay the costs Mr. Sudhir incurred throughout the long court battle with the central bank.
“The appellant receivership ended on January 2018 and BoU is to pay costs therein and in the court,” reads one of the documents from the court.
Lawyers say that since receivership ended, BoU does not have any options but to return the assets and pay the costs of the suits.
Both the High Court and the appellant courts have since concluded that the central ban was in blatant violation of the provisions of the Financial Institutions Act of 2003, there was no valuation of the assets of Crane Bank Ltd when the BoU sold to dfcu Bank.
In its statement, the BoU claimed to have sunk Shs 490 billion as liquidity support into Crane Bank during statutory management. But immediately before BoU takeover of Crane Bank, one of its major shareholders, Mr. Sudhir, put into the bank $8m (Shs 30 billion). Another shareholder, Chhotalal Kantaria, gave BOU $7.5m (Shs 28 billion). After the sale of Crane, Bank Mr. Sudhir paid yet another $8m (Shs 30 billion) to the BOU, making a total of Shs 88 billion from shareholders.
The Auditor-General has since stated that the BOU failed to account for the Shs 490 billion.