KAMPALA – Nakaseke South Member of Parliament Paulson Lutamaguzi Ssemakula has said that the government should expedite the compensation of city tycoon Sudhir Ruparelia for all the losses he incurred in the wrongful closure of his bank Crane bank Ltd.
While appearing on CBS radio talkshow on Monday night, Mr. Lutamaguzi, a member of Parliament’s Committee on Commissions, State Enterprises and Statutory Authorities that extensively investigated the closure of seven commercial banks including Crane Bank, says the fact that Mr. Ruparelia has consistently won all the court battles shows that the more the government delays to sort the matter, the bigger the liability in costs.
The BoU has kicked off fresh legal challenge against the directors of the defunct Crane Bank after Governor Emmanuel Tumusiime Mutebile in a public notice last Friday said they would liquidate Crane Bank, four years after the BoU seized control of the institution.
“Bank of Uganda (BoU) took over management of Crane Bank Ltd (CBL) on October 20, 2016 and subsequently progressed it into receivership on January 24, 2017.
In exercise of its powers under section 99 (1) & (2) of the Financial Institutions Act, 2004, BoU has now placed CBL under liquidation and ordered the winding up of its affairs. The Central Bank shall be the liquidator of CBL,” Mr. Emmanuel Tumusiime-Mutebile, said in the notice.
But MP has now called for a complete overhaul of the entire Bank of Uganda operations as recommended by COSASE saying that, the way the central bank is run makes it difficult for oversight bodies including parliament to call its management to order.
“Overhauling Bank of Uganda operations and other institutions of government would help to eliminate all the messes being done by those who think are the untouchables,” the MP said.
Meanwhile, city lawyer Isaac Ssemakadde of the Center for Legal Trust says Bank of Uganda and its legal advisors are wrongly interpreting the Financial Institutions Act by rushing to illegally liquidate Crane Bank, before the court processes are exhausted.
The city attorney says, already the two court rulings from the High Court’s Commercial Division and the Court of Appeal had already sent a warning to the central bank for wrongly interpreting the Financial Institutions Act and misusing the Act while managing the banking institutions in the country.
“The Parliament of Uganda also investigated Bank of Uganda on the closure of seven commercial banks where Crane Bank was the last one and its findings are clear and pointing at the Central bank for illegally closing these local banks,” he said.
Mr. Ssemakadde now says that the actions of the central bank to rush to liquidate Crane Bank out of fear and panic without waiting for the final decision of the Supreme Court is an act of contempt and disrespect of courts.
The COSASE Report, adopted by Parliament last year called for the compensation of directors in three banks – the Crane Bank Ltd, National Bank of Commerce, and Global Trust Bank, after the MPs faulted Bank of Uganda for negligently disposing of the defunct banks and breaking several provisions of there Financial Institutions Act (2004).
MPs who investigated the rot at Central Bank led by Abdu Katuntu found that the process of selling Global Trust Bank, National Bank of Commerce and Crane Bank Ltd on several instances “contravened section 95 (3) of the FIA 2004” and lacked the principles of “prudence, transparency and fairness” enshrined in the constitution and the FIA Act.
The MPs called for action against the Bank of Uganda officials involved in the seizure and irregular sale of the banks, as well as compensations to the aggrieved bank owners.
