- September 16, 2021
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Bank of Uganda withdraws Appeal against City Tycoon Sudhir Ruparelia, Meera investments
The Bank of Uganda (BoU) has finally withdrawn a Supreme Court appeal that was contesting the Court of Appeal’s dismissal of the case it filed on behalf of Crane Bank Ltd (in Receivership) vs. Sudhir Ruparelia and Meera Investments Ltd.
In a September 15 notice of withdrawal, the Supreme Court Registrar indicates that BoU has decided not to prosecute the appeal and will pay costs.
The notice signed by the central bank lawyers Messers Byamugisha & Co Advocates, confirms the latest victory for Dr Sudhir who has given the Central Bank run of their money in the court, ever since they closed his bank.
Last year, Bank of Uganda ran to the Supreme Court to appeal the Court of Appeal ruling, which upheld an earlier High decision to dismiss a case that had been filed against businessman Sudhir by Crane Bank in receivership.
Prior, the Court of Appeal in Kampala threw out a case against Dr Sudhir.
The Panel of judges led by acting Chief Justice Alfonse Owiny- Dollo upheld the judgment of Commercial Court judge David K. Wangutusi in application filed by Bank of Uganda seeking a refund of Shs397 billion from Sudhir which he allegedly siphoned from the defunct Crane Bank. Court dismissed case with costs.
Bank of Uganda/Crane Bank in receivership (BoU) had appealed against an August 26, 2019 ruling where the High Court Commercial division dismissed with costs, the multi-billion lawsuit.
In his ruling, Justice 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.
BoU /Crane Bank in Receivership had sued the property mogul and Meera Investments Limited for allegedly fleecing the defunct Crane Bank Limited (CBL) of Shs397 billion that the central bank wanted refunded.
Sudhir denied the allegation and has since counter-sued BoU, seeking compensation of $8m (Shs28 billion) in damages for breach of contract.
He asked the Commercial Court to dismiss the case arguing that the central bank over stepped 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 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 it’s managers.
However, in response to the submissions of Sudhir’s lawyers, BoU through its lawyer Dr Joseph Byamugisha told court that when a financial institution is placed under receivership the power to commerce or to continue with a civil suit does not stop.
BoU on October 20, 2016 placed Crane Bank under statutory management for being under-capitalised.
The central bank attributed the under-capitalisation to mismanagement and insider lending, resulting in Crane Bank’s unsustainable non-performing loan portfolio. The bank was later sold to dfcu Bank in January 2017, although the central bank retained some of its liabilities.
Bank of Uganda closed Sudhir’s bank, then the second biggest bank, and largest indigenous financial institution
Meanwhile, separate investigations by the Auditor General and Parliament recently found contrary information regarding the takeover and sale of Crane Bank. It was also discovered that BoU managers fell short of professionalism, having closed six more banks in the same shabby and illegal manner.