By Andrew Irumba
Tycoon Sudhir Ruparelia is couting down days before the High Court Commercial Division delivers its ruling in the case he filed against Bank of Uganda regarding the dubious sale of Crane Bank to dfcu bank and BoU’s attempt to squeeze Shs397Bn from him.
SpyUganda has learnt that the High Court will on Monday, August 26, 2019 deliver its final decision on the preliminary objection by Sudhir in the case in which the Bank of Uganda sued him with others for allegedly defrauding his closed Crane Bank of Shs397Bn.
After successfully blocking three sets of Bank of Uganda and dfcu Bank lawyers from a representation in the case, after court indicted them for conflict of interest, Sudhir will be looking to do a double on the Central Bank after his Attorneys cited numerous authorities in bringing up the objection.
Sudhir, through his lawyers of Kampala Associated Advocates, rubbished claims by the Central Bank that he allegedly conned Crane Bank Ltd of Shs397Bn in fraudulent transactions.
Justice David Wangutusi set August 26 for the ruling after Sudhir had through his Kampala Associated Advocates lawyers prayed to court to dismiss the BOU case arguing that the central bank overstepped it’s mandate in filing the case.
Lawyer Elison Karuhanga of KAA argued that when dissolving a bank, BoU had three options; naming an admistrator for Crane Bank, which in management is called statutory management, receivership or liquidation, which they didn’t do.
Karuhanga argued that ”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 (BoU).”
Sudhir’s lawyers also faulted BoU for acting hurriedly and overstepping her mandate in hurriedly selling off the Bank to dfcu Bank, a deal that has since attracted criticism and raised lots of eyebrows because of the way it was hastily conducted.
Sudhir’s lawyers also argued 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; the law gives the receiver 12 months to carry out his or her functions and after this, he cannot do anything.” Karuhanga noted, arguing that BoU never waited for the stipulated time to elapse before selling Crane bank and all its presumed assets to dfcu bank.
Karuhanga noted that BoU had 12 months within which to carry out the four functions which did not include suing but they didn’t proceed accordingly and instead went ahead to sell Crane Bank to dfcu Bank, well-knowing that what they were doing was illegal.
Sudhir’s other lawyer Bruce Musinguzi argued that he (Sudhir) was no longer the majority owner of Crane Bank which he founded after Rasik Kantaria, a Kenyan national, on December 6, 2010, snapped up 47 per cent of the bank’s shares, hence BoU erred in suing him as the Majority Shareholder.
Musinguzi also noted 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 suing Sudhir in the capacity of biggest shareholder doesn’t hold any water and has no merit.
Musinguzi also argued that under Uganda’s Constitution and 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 BoU went ahead to sell the Crane Bank’s perceived properties to dfcu bank.
However, while responding to submissions by Sudhir’s lawyers, BoU through its 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.