By Spy Uganda
Kampala: You see, it’s quite understandable that after loosing multimillion case right from the lowest to the highest court, Bank of Uganda (BoU) legal team and their external legal contractors could have lost ‘nuts’ as a result of depression and other related matters, but according to Meera Investments Ltd and tycoon Sudhir Ruparelia’s lawyers, they can’t use that excuse or anything next to that to fleece their clients of their well deserved compensations born out of a five year protracted legal battle, which BoU lost on 11/Feb/2022.
It’s should be remembered that BoU and Crane Bank Ltd (In receivership) dragged Dr.Sudhir Ruparelia and Meera investments Ltd to court accusing them of bringing down their own bank,CBL among other things. BoU based on that and took over the Bank.
As if the above wasn’t enough,they took it over on 24/Feb/2017, put it under receivership and via a phone call, sold it just the next day on 25/Feb/2022 to Dfcu bank! They there after dragged the share holders to court. To cut the story short, all courts disagreed with their actions and have since ordered BoU to not only revert the bank to its shareholders but also pay penalities, which are in billions. So instead of abiding by court ruling,BoU last week went on a “press-release spree” where by, in there, they tend to contest and contradict court rulings. But as late Idi Amin said one time, that if you want to win your opponent outright, just give him a knockout to deny even a biased referee a chance to fault you.
Meanwhile, this afternoon KAA advocates clarified that BoU is simply playing in the gallery otherwise all matters before Court concerning BoU,CBL were resolved by supreme court on 11/Feb/2022, and what is awaiting now is BoU to pay as per the orders.
“We would like to inform the public that on 11 February 2022, the Supreme Court finally and conclusively determined the dispute between BOU and our clients.
The law firm says, “The effect of the Supreme Court decision is that the company has reverted to its shareholders. The decision also means that BOU lost control of CBL from the 20th of January, 2018 and any decision made on behalf of CBL by BOU is reversed. This is not a mere technicality. This is a fundamental principle- those in authority must act in accordan ce with the express provisions of the Law. BOU cannot exercise power outside or against the law nor is it above the law.”
The law firm further clarified, “The statement by BOU that a review application is pending before the Court is incorrect. This review application arises from an appeal which was finaly determined by their own withdrawal. It therefore stands moot. Contrary to the assertions of BOU, the ruling of the court was within the ambit of the Financial Institutions Act. It was overtaken by events.”
KAA advocates says that 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.
“BOU must act within the four corners of the laws of Uganda. 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,” says the law firm in the press statement.
Summary Of This Saga
For starters, after dubious sale of tycoon Sudhir’s Bank assets to Dfcu, Bank of Uganda through Crane Bank (in receivership) filed a suit against Sudhir and Meera Investments seeking to recover over Shs400 billion and 48 land titles.
“The 1st respondent was closed as a financial institution and placed under receivership. Upon closer, it ceased being a financial institution under the Act and it could therefore, not be progressed to liquidation. The 2nd respondent’s act therefore of moving the 1st respondent to liquidation are contrary to the above clear provisions of the law and the same cannot be sanctioned by this court,” states part of the ruling.
Because it was not satisfied, BoU filed an appeal to the Court of Appeal which didn’t waste its time but upheld the findings of the High Court thus pushing it to the Supreme Court that has today ruled in favor of Sudhir…just like previous court rulings.
You many actually remember that in all legal battles, Courts of law have been ordering Bank of Uganda to pay costs to Sudhir who has floored them multiple times.
Hint On Previous Rulings
In previous court rulings, BoU said that the decision of shutting Crane Bank was necessary upon discovering that it had significant and increasing liquidity problems that could not be resolved without the Central Bank’s intervention, given that Crane Bank had failed to obtain credit from anywhere else.
“An inventory by external auditors found that the assets of Crane Bank were significantly less than its liabilities. In order to protect the financial system and prevent loss to the depositors of Crane Bank, Bank of Uganda had to spend public funds to pay Crane Bank’s depositors,” BoU governor, late Tumusime Mutebile said then.
However, tycoon Sudhir denied the allegation thus counter-suing BoU, seeking compensation of $8m (Shs28 billion) in damages for breach of contract.
He asked the High Court to dismiss the case arguing that the Central Bank overstepped its mandate in commencing court proceedings against him and his Meera Investments Company.
Presenting an objection against BoU, Sudhir through his lawyers Kampala Associated Advocates, told Justice Wangutusi that when dissolving a bank, BoU had three options including putting someone else in its management – what is termed as statutory management, receivership or liquidation.
Counsel Elison Karuhanga a lawyer at Kampala Associated Advocates, argued that however, BoU chose to go for receivership yet under the law, specifically only the manager and the liquidator of the said bank is mandated to file a suit and not a Receiver.
He further explained that BoU as a Receiver could only dissolve or sell Crane Bank within 12 months but not sue its managers.
But Where Did It Begin From?
On June 30, 2017, Crane Bank Limited (in Receivership) took Mr. Sudhir Ruparelia and his Meera Investments Ltd. to court for causing financial loss amounting to UGX 397 billion to Crane Bank in fraudulent transactions and land title transfers.
Crane Bank (in receivership) in its Civil Suit No. 493 of 2017 sought High Court to compel Mr. Ruparelia to pay back the US$80,000,000, US$9,270,172.00, US $ 3,560,000.00, US$990,000.00 and UGX 52,083,995.00 as compensation for breach of fiduciary duty.
While Hon. Justice Wangutusi dismissed the UGX397 billion case against Mr. Ruperalia on a technicality, alleging that Crane Bank (in Receivership) lost its powers to “sue” and to “be sued”, thus rendering its suit a nullity, Crane Bank (in Receivership) maintaining that receivership is a management situation, and hence no legal change as to the capacity of a company to sue and be sued.