By Our Reporter
The management of Dfcu bank has been advised by the Board of Directors Bank of Uganda (BoU) to sue their lawyers for the Shs47Bn which they want as compensation for being ejected from tycoon Sudhir Ruparelia’s buildings.
Spy Uganda revealed recently how Dfcu is demanding Shs47Bn from BoU, as compensation for rescinding to buy 48 properties they had inherited from former Crane Bank Limited when they bought it from BoU in 2017.
It should be noted that when Dfcu bought CBL, they inherited all the assets and liabilities the bank had, including the 48 properties which housed its branches across the country.
Following the takeover, Dfcu occupied the 48 properties and set up branches there. They went ahead transfer title of ownership of the properties into the names of Dfcu bank, on advice of their lawyers of Sebalu, Luke and Company Advocates.
However, later Sudhir dragged them to the Commercial court, arguing that the properties actually belonged to Meera Investmenta Limited and had been leased out to Crane bank, so Dfcu had erroneously taken and was illegally occupying them.
Court ruled in Sudhir’s favour, ordered Dfcu bank to vacate the properties, compensate Meera Investments for all the properties they had been illegally occupying and cancel the titles of ownership for the same.
The ruling left Dfcu Bank bosses with no option but to count losses as they look for new properties to which they can shift their branches, such that they can give Sudhir vacant possession.
However, after realising that they stood to lose a lot, shrewd Dfcu bosses hatches a plot to squeeze Shs47Bn from the Tax payers’ money in BoU purporting it is compensation for being thrown out of buildings which BoU had undertaken to sell them.
However, the BoU has since advised Dfcu Bank that they should sue their lawyers for misleading them into illegally taking over a d occupying Meera Investment properties instead of asking for Shs47Bn
But it should be noted that whereas Dfcu bank is demanding Shs47Bn, the same bank undervalued the Meera properties and paid only Shs10Bn to BoU as consideration for their purchase, until they decided to reverse their decision to buy them following the court ruling .
Spy Uganda has learnt that the BoU BoD held a meeting last week to discuss the matter of Dfcu and their demand for Shs47Bn for losing the Meera Investment properties and the recent court ruling at Commercial Court, which saw BoU lose a case it had filed against Sudhir on behalf of Crane Bank in Receivership.
Our Spy who is privy to what transpired during the meeting revealed that the Governor, Emmanuel Tumusiime Mutebile, rubbished Dfcu’ demands, stating it clearly that he can never effect such dubious payments, given the fact that the transaction involving Meera Investment properties was ‘suspicious’ and therefore, a matter before courts of law.
Mutebe said “I am the chairman of the Board and governor of this great institution called Bank of Uganda. I don’t remember ever sanctioning this transaction and why is it that Dfcu is returning these branches at this time when there is an ongoing case? Ladies and gentlemen, let us not be used as shields to cover up for others. I propose we wait for the case in court.”
The saga started on October 20, 2016, when BoU closed CBL and put it under receivership. On January 25, 2017 BoU transferred some of CBL’s assets to Dfcu Bank at Shs200Bn, paid in installments, without interest on top.
After the transfer, Dfcu lawyers Sebalu & Lule Advocates convinced Management that the Bank had mandate to take take over the properties and even change the titles of ownership into the Dfcu’s names, something they blindly did, not knowing they were shooting themselves in the foot.
It was until later in 2017 when evidence adduced in court proved that Dfcu bank had been misled by Kampala Law firm Sebalu & Lule Advocates to illegally transfer title properties that belong to Meera Investment Limited into their names.
On May 8, 2017, Sebalu & Lule Advocates who had in April that year been barred by the High Court from representing Dfcu bank against businessman tycoon Sudhir for being conflicted, misled Dfcu bank into transferring leasehold titles from Crane Bank Limited into Dfcu bank names, a move that would later backfire.
According to leaked documents titled, “ Transfer of former Crane Bank household properties’,
“Sebalu & Lule Company Advocates skipped important aspects of the law including the fact that banks are not allowed to invest in business for fear of conflict of interest with their clients, apart from their main premises.
“Our opinion is that although the proposed approach of registering caveats provides Dfcu with some level of legal protection, its indisputable title to the leasehold properties can only be guaranteed through the registration of transfers executed by BoU in favour of Dfcu. Accordingly, in light of the length of time between the completion date and when Dfcu can validly exercise the option to rescind the purchase of the leasehold properties our recommendation is that transfers be registered immediately,” Sebalu & Company advised Dfcu bank.
But it should be noted that BoU in its 2018/ 2019 Annual Report had earlier confirmed that Dfcu bank would be leaving 48 properties in which the defunct Crane Bank Limited (CBL) was operating its branches before it was taken over by Dfcu.
“Following the Court’s ruling … Dfcu Bank Limited in a letter dated September 12, 2019 communicated to BoU its decision to exercise its option to rescind its interest in purchasing the 48 properties pursuant to clause 8.7 of the Agreement,” BoU said in its latest annual report.
The report added that as part of the rescinding of this purchase, Dfcu would return to BoU Certificates of title for Meera Investments Limited ‘and require Bank of Uganda to pay Dfcu the new book value of properties recorded in the assets and inventory compilation as October 20, 2016, something Prof.Mutebile is vehemently objecting to and has since advised them to sue their errant lawyers for misleading them into such a multi billion loss