By Our Reporter
Things are turning from bad to worse for Dfcu Bank and as you read this, the Bank has started evicting its own branches from properties formerly leased by Crane Bank from Meeera Investments Limited.
It should be noted that last year the High Court Commercial Division ruled that Crane Bank had illegally taken over tycoon Sudhir’s properties after buying Crane Bank from Bank of Uganda, which had put it under receivership. Court also ruled that Dfcu bank should compensate Meera Investments LTD with billions of Shillings for the losses MIL had suffered during the time Dfcu Bank was illegally occupying Sudhir’s properties.
Following the ruling, Dfcu Bank rescinded a contract it had brokered with BoU to buy properties that initially housed Crane Bank Branches across the country and subsequently advertised for contractors to bid for the construction of new facilities that would house the Bank’s branches.
We have since learnt that Dfcu Bank has started relocating from Sudhir’s properties and the first one they evicted themselves from is located along Kampala Road. Our Spy reveals that on Friday Dfcu bank packed its belongings and left buildings owned by Meera Investments.
Insiders reveal that the relocation process that started on January 31, 2020 and continued throughout to February 1st, with trucks moving furniture from the Crane Chambers Kampala Road branch.
The long awaited exit follows a long battle that has seen DFCU Bank suffer repercussions ever since they bought Crane Bank from Bank of Uganda, a deal that has since turned into a nasty Pandora’s Box.
The deal has cost Dfcu its corporate governance reputation after several being cited in deal over the years. Trouble for Dfcu started after Bank of Uganda lost a case to Sudhir last year and that was when Dfcu realised they are going nowhere with BoU assurances and the secret deal they had made wasn’t standing. Instead they realised they ate to pay heavily for buying Crane Bank!
In a notice released last week, Dfcu informed its customers and staff that it was moving its Kampala Road Branch to its new premises at plot 40 Kampala Road effective Monday 3, 2020.
The notice reads in part thus; “During the process , you can access our services at Market Street Suncity and Kyadondo branches in addition to our digital channels.”
It should be noted that BoU in its annual report 2018/2019, revealed that on September 12, 2019, Dfcu told them about its decision to rescind its interest in purchasing the 48 properties belonging to Meera Investments Limited pursuant to clause 8.7 of the agreement.
Dfcu had been operating its business branches in buildings belonging to Sudhir’s Meera Investments Limited since it controversially acquired Crane Bank Limited in January 2017, until court ruled that the occupation was illegal.
“As part of rescinding of the purchase, Dfcu will return to Bank of Uganda Certificates of title for Meera Investments Limited properties and requires Bank of Uganda to pay Dfcu the net book value of the properties recorded in the assets and inventory compilation report as at October 20, 2016,” BoU stated in another move that sparked off lots of criticism since Dfcu had gotten the buildings without spending a coin.
Dfcu Bank’s request for Shs47Bn refund yet it had paid Shs10Bn so far for the properties exposed the Bank’s fraudulent activities further, which has since landed the Bank into more problems.
However, according to a highly placed source at BoU, the governor Prof Emmanuel Mutebile was not willing to meet Dfcu Bank officials to resolve the matter after it transferred 48 lease titles of Meera Investments back to the Central Bank.
When Dfcu made a submission for the refund, BoU tasked its officials to justify the Shs47Bn which they failed to do, which sparked off allegations that there were BoU officials who wanted to connive with Dfcu Bank Management to rip off billions of tax payers’ mine in a sham compensation.
In October last year, Dfcu denied claims that it was closing some of its branches across the country. Media reports had alleged that the commercial bank was in a move to close 22 of its branches starting October 14, 2019.
In a statement, Dfcu said, “The Bank wishes to clarify that the purported notice in respect to branch closures is false and did not originate from dfcu Bank.”
The Bank which has a network of 63 branches across the country further revealed that they are in the process of implementing their digital strategy to drive better customer experience, improve efficiency and align their operations with emerging trends in the financial sector.
Nevertheless, what remained a fact was that dDfcu was considering vacating 22 buildings of Sudhir Ruparelia’s 48 properties.
The development came hot on the heels of High Court Commercial Division ruling in favour of the property mogul in a Shs397 billion lawsuit that was filed by the central bank against him in the aftermath of the closure of Crane Bank.
In his ruling, Justice David Wangutusi stated that BoU/Crane Bank (in receivership) did not have a legal basis to sue Sudhir, the owner of Crane Bank, then the second biggest bank in Uganda. Court ordered Bank of Uganda to pay Sudhir’s legal costs and vacate his buildings.
Trpuble for BOU came after the Central Bank and Crane Bank in Receivership sued Sudhir and Meera Investments Limited for allegedly fleecing the defunct Crane Bank Limited (CBL) of Shs397Bn which BoU wanted refunded.
However Sudhir and his co-accused denied the allegation and BoU failed to adduce evidence pinning them, which prompted Justice Wangutusi to rule in Sudhir’s favour, before he slapped legal costs worth billions of Shillings on BoU.
Sudhir has since counter-sued BoU, seeking compensation of $8m (Shs28Bn) in damages for breach of contract, plus illegal closure and sale of Crane Bank to Dfcu Bank.