Sudhir, BoU Set For Showdown As Commercial Court Sets Date For Case Ruling

Sudhir, BoU Set For Showdown As Commercial Court Sets Date For Case Ruling

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By Andrew Irumba

Kampala: City businessman Sudhir Ruparelia is set to Rambo with Bank of Uganda officials after the High Court Commercial division setting the date for ruling of the case which BoU filed against him, Meera Investments LTD and others.

SpyUganda has learnt that court will on Monday, August 26, 2019 decide on the preliminary objection by Sudhir in the case in which BoU sued him with an aim of recovering Shs397Bn.
Sudhir has so far successfully blocked three sets of Bank of Uganda and dfcu Bank lawyers from a representation in the case, after court indicted them for conflict of interest. Now Sudhir looks at doing a double on the Central Bank after his Attorneys cited numerous authorities in bringing up the objection against the BoU suit.

Through his lawyers Kampala Associated Advocates, Sudhir trashed claims by BoU that he allegedly conned his own Crane Bank Ltd of Shs397Bn through fraudulent transactions.

High Court Justice David Wangutusi set August 26 for the ruling after Sudhir, through his lawyers, asked court to dismiss the BOU case, arguing that BoU overstepped it’s mandate in filing the case.

Sudhir’s lawyer Elison Karuhanga of KAA,argued that when dissolving a bank, BoU had three options; appointing an administrator, what is called statutory management, receivership or liquidation but they didnt and instead opted to quickly sell it to dfcu bank.

”[The central bank]chose to go for receivership. Under the law, specifically, only the manager and the liquidator can sue. The case cannot be filed by a receiver,” said Karuhanga.
Karuhanga and his team also faulted BoU for acting hurriedly and overstepping its mandate by quickly selling Crane Bank to dfcu bank under dubious circumstances.
He added that “The receiver cannot be sued on that act and cannot sue anyone. His action is protected by the law. The second point we are raising is that the receivership is limited by time; he law gives the receiver 12 months to carry out his or her functions and after this, he cannot do anything.” However, BoU didn’t even wait for the 12 months to expire befopre selling Crane bank to dfcu bank.

Bruce Musinguzi, also a member of KAA Adocates, argued that Sudhir was no longer the majority owner of Crane Bank that he founded after Mr Rasik Kantaria, a Kenyan national, on December 6, 2010, snapped up 47 per cent of the bank’s shares.

He added that “Mr Kantaria later transferred his shares to White Sapphire Ltd, a company incorporated in Mauritius and that a one Jitendera Sanghani, a British citizen, held 4 per cent stake in Crane Bank, hence there was no merit in BoU suing Sudhir as an individual or Meera Investments.

Musinguzi also noted that under Uganda’s Constitution and the Land Act, Crane Bank in Receivership could not own or hold freehold property and was, therefore, not capable of holding the suit property in it’s names, yet dfcu bank went ahead to seize Meera Investments properties claiming they were owned by Crane Bank
However, i response to submissions by Sudhir’s lawyers, BoU lawyer Dr. Joseph Byamugisha told the court that when a financial institution is placed under receivership, the power to commence or to continue with the civil suit does not stop.
The case at hand arose on January 25, 2017, when BoU put Crane Bank Ltd under the receivership, before selling it to dfcu bank. Shortly therefater BoU acting in trust of Crane Bank, sued Sudhir, Meera Investments Ltd andf others for allegedly conning Crane Bank of Shs397Bn through fraudulent transactions, allegations Sudhir refuted. He counter-sued BoU, seeking compensation of USD8m (about Shs28b) in damages for breach of contract.

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