KAMPALA – Lawyers representing city tycoon Sudhir Ruparelia have on Thursday called out the Bank of Uganda, for misrepresenting the Supreme Court dismissal with costs their appeal against businessman Sudhir Ruparelia and his real estate arm—Meera Investments Ltd.
In the statement, the KAA dismissed the BoU reasoning that there was still an application before court, arguing that that this arose from an appeal which was finally determined by their own withdrawal, and “therefore, stands moot”.
“Contrary to the assertions of BOU, the ruling of the court was within the ambit of the Financial Institutions Act. The import of the Supreme Court decision is that BOU is also subject to the laws of Uganda and cannot act in a manner that places it beyond the reach of the law,” the lawyers hit back at the central bank.
The BoU last Friday said in a press statement that it is still pursuing one of the grounds to the case which “relates to the interpretation and application”.
The Central Bank also claimed that “the main suit in relation to a claim against the shareholders for wrongful extraction of funds from Crane Bank has never been heard on its merits.”
But the KAA says the statement by BoU is misconceived and “extremely incompetent” because the case has been concluded.
The Lawyers also noted that BoU must act within the law and implement the orders of court.
“Our Clients shall take all the necessary steps to ensure that BOU complies with the Orders of the Supreme Court, the Court of Appeal and the High Court of Uganda,” the KAA said.
The February 11 ruling brought to an end the 5-year long-standing commercial dispute between businessman Sudhir and the Ugandan banking regulator, dating back to 201t, but in a statement on Friday, the Central Bank largely sidestepped the key issues of the case, and maintained that it is still pursuing one of the grounds to the case, and an application, which Sudhir’s lawyers now say is inconsequential.
Justice David Wangutusi of Commercial Court in August 2019 dismissed the first case in which BoU claimed that Ruparelia and his Meera Investments Ltd pulled UGX. 397 billion out of his own Crane Bank Ltd.
On, June 30, 2021, the BoU insisted in a statement that receivership does not take away the corporate personality of a company which includes the right to trace and recover assets and the right to sue for those assets.
In the preliminary stages of the appeal, the Supreme Court in August last year, dismissed with costs, an application by lawyers representing the Bank of Uganda (BoU) in which they sought to substitute the court record from Crane Bank Ltd (in receivership) to Crane Bank Ltd (in Liquidation), with the court rejecting the move, as in bad faith and intended to circumvent facts.
A panel of the Supreme Court Justices including Ruby Opio-Aweri, Faith Mwondha, Lillian Tibatemwa, Ezekiel Muhanguzi and Night Tuhaise, in a ruling issued on August 12, 2021 rejected arguments by BoU lawyers led by veteran attorney the late Dr. Joseph Byamugisha, reasoning that Crane Bank Ltd (in Receivership), Crane Bank Ltd (in Liquidation), and Crane Bank Ltd are three distinct entities with different rights, powers and obligations.
Earlier in the High Court, Justice Wangutusi noted in his ruling 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 Ltd 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.
It is understood that the Central Bank was expected to concede defeat and pay costs as ordered by the court.