Bank of Uganda says after investigating the mismanagement of Crane Bank, it discovered that the bank’s proprietor, Sudhir Ruparelia, embezzled over Shs400bn in fraudulent transactions.
The Central Bank has therefore decided to take the tycoon and his Meera Investments Company to court so he can refund the said money.
Through Crane Bank which is now under BoU receivership since October last year, Sudhir did all kinds of illegal transactions using phony bank accounts, according to a report quoted by the state-run, New Vision.
Sudhir also used sophisticated false accounting together with his business associates; Jitendra Sanghani, Rasiklal Chhotalal Kantaria-a Kenyan tycoon and founder of Prime Bank, Godfrey Kirumira and Mohammed Ali.
Sudhir and his firm (Meera) stole over $92m and more than Shs8.2b from the bank which must be refunded at an interest rate of 12% per annum and 26%, respectively.
According to documents from High Court in Kampala, varying sums of money valued in dollars and shillings were fraudulently withdrawn from Crane Bank, under Sudhir’s instructions between 2013 and 2016.
BoU argues that $80m was siphoned from Crane Bank on October 26, 2013 and over $9.2m “extracted” from the institution on different dates in the same year, purportedly for the supply of core banking systems and software licences.
Over $3.5m and more than sh8.2b was taken out of the bank on December 27, 2014 disguised as credit facilities to Infinity Investments Limited and eventually written off as bad debts under Sudhir’s instructions.
Infinity Investments Limited is reportedly owned by Sudhir.
A total of $990,000, according to BoU, was withdrawn from Crane Bank and paid to Meera Investments as rent fees, illegally, between 2013 and 2016, the document argues.
The Central Bank says Sudhir did not remit over sh52b in workers’ savings to the National Social Security Fund between 2007 and 2016.
BoU says Sudhir fraudulently transferred freehold titles of 48 plots of land (where the bank has its branches) purchased and developed using the Crane Bank’s finances into the name of Meera Investments, from Crane Bank.
The plots of land, according to the court documents, were then leased back to the owner (Crane Bank) at high fees.
Each plot was reportedly leased to the bank at sh100m as premium for 49 years and a $6,000 in ground rent per year, payable to Meera Investments.
In January this year, BoU transferred the assets and liabilities of the Crane Bank to dfcu Bank.