The Commercial Division of the High Court in Kampala has dismissed an application by the Bank of Uganda seeking to shield it’s self from accounting to shareholders, whose Greenland Bank Limited was fraudulently closed.
Greenland Bank Limited, one of the maiden indigenous bank owned by the late Sulaiman Kiggundu, was incorporated on August 3, 1990 until April 1, 1999 when BoU closed it and placed it under liquidation.
Last year, a group of shareholders of Greenland Bank Ltd petitioned Commercial Court indicating that BoU has taken a very long time to conclude the liquidation process of their bank.
“A declaration that the continued liquidation of the 2nd defendant (Greenland bank) for more than 21 years without accountability to the plaintiffs is irregular, unreasonable and in bad faith,” the court document reads in part.
The shareholders also wanted the sale of the properties belonging to the bank on Plot 30 on Kampala Road and Plot 66 William Street declared irregular on the basis that they were sold below the market value.
BoU wanted the case before court dismissed based on the preliminary point of law; for being barred by limitation and not disclosing a cause of action.
The central bank contend further that the claim in relation to the sales of Plot 30 Kampala Road and Plot 66 William Street were completed in the year 2003 over 19 years ago and the proceeds of sale were duly appropriated and accounted for in the liquidation accounts and accordingly, any claims in relation to those sales is time barred.
However, the application before Justice Stephen Mubiru has been dismissed —meaning Court will proceed with the hearing of the case.
Justice Mubiru said there are major facts to be established by court.
“The application is incompetent in as far as it concerns matters of facts majorly that require evidence and investigation by this Court which cannot be dealt with as preliminary points of law. The suit is neither barred by limitation, res judicata nor is it frivolous and vexatious.
“Since the determination of the issue of limitation in this case in respect of the rest of the claims is not a pure question of law, it cannot be decided as preliminary issue. The rest of the objections therefore stand overruled. The costs of the application shall abide the outcome of the suit,” Hon Justice Stephen Mubiru ruled on January 17, 2023.
M/s Semuyaba, Iga & Co. Advocates together with M/s Nyanzi, Kiboneka, Mbabazi and Co. Advocates on behalf of the respondents [shareholders of Greenland Bank] submitted that there are grounds in the application that are not pure points of law to be dealt with at the preliminary stage of the trial.
The bank’s shareholders want court to order the Central Bank render the true account of the management of the properties that belonged to the companies, associated with the bank at the time of closure.
The companies are Fiba Uganda Ltd, Fiba Coffee Uganda Ltd, Entebbe Resort Beach Ltd, Rock Hotel Tororo Ltd, GG Towers Ltd, Greenland Insurance Company Ltd, NBA Rose Ltd, Kampala University, Sapoba Printers, Greenland Bank Tanzania, Lenman Clinic Ltd, Greenland Clearing and Forwarding, Greenland Towers, Greenland Investments, and Greenland Forex Bureau Kenya, Uganda Grain Milling and Greenland Finance.
“It is not true that the liquidation process continued for eight (8) years until 5th November, 2007. By a letter dated 14th July, 2020 the 1st applicant [BoU] stated that the winding up process of Greenland Bank Limited was yet to be concluded, since there were significant pending matters related to the verification and resolution of creditor claims,” the lawyers argued.
The shareholders instructed their lawyers to file the suit at the right time after obtaining reports of the Auditor General dated August, 2018 and the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) dated February, 2019, which reports unearthed the fraudulent activities of BoU.