Last week, the rejuvenated Parliamentary Committee On Statutory Authorities and State Enterprises (COSASE) ordered the auditor general to carry out a deeper audit into the circumstances surrounding the takeover of banks including Sudhir’s Crane Bank.
Also in what seems to be a continued damning indictment on BOU’s supervision department under Justin Bagyenda, the committee didn’t shilly-shally about raising a red flag on its efficiency.
The crane bank saga isn’t a new phenomenon for it has been a public secret for close to two years now. The rushed takeover of CBL and its consequential donation to DFCU bank was highly replete and saddled with among others; deceit, financial impropriety, conflict of interest and deliberate abnegation of natural justice rules.
It was also a classic case of connivance by elites in BOU especially the supervision department under Justin Bagyenda and a legal cartel of “mafiosos” under MAKKS advocates. The seemingly hideous characters were more than anything else, consumed with a thrilling desire to frustrate and humiliate East Africa’s richest man, Sudhir Ruparelia and his empire.
Crane bank’s operations were hampered by BOU which before takeover had stopped CBL from issuing out loans, letters of engagements, overdrafts and security bonds.
This technically disabled the bank’s ability to transact its core/primary business. This was not only a deceitful but equally, a deliberate dubious move BOU that would culminate into the donating of the glorious CBL to DFCU at a paltry credit of Uganda Shs200billlion which will be paid in instalments till 2020.
The above notwithstanding, there was supposed to be a joint valuation as per the terms of the CSR agreement. This never saw the light of day (It wasn’t done). In a glaring display of insatiable greed and financial impropriety, MAKKS advocates invoiced BOU on 19 July 2017 demanding for USD 251,045. Why would a well-meaning firm demand pay for a job it didn’t do?
Dastardly as this sounds, BOU went ahead to donate CBL to DFCU at the lowest price of 200 billion shillings despite having an asset base of 398 billion shillings. This explains the quadrupling of DFCU’s net profit to 114.05 billion shilling as at June 2017, and the surge in DFCU’s income from 83.7 billion shillings in 2016 to 255 billion shillings as at 30th June 2017.
Conflict of Interest
MAKKs advocates who have become famous for all their maliciousness in this scandal, can be adjudged as “catawompus” double dealers. They were lawyers of CBL and frog jumped to represent BOU in this case. It is undoubted that they leaked secrets to BOU.
Their continued presence in this case raises glaring questions about conflict of interest. Abstaining from this case would do those interested in this case a service.
Ignoring of natural justice rules
The rushed takeover of CBL and its eventual donation to DFCU highly ignored the natural rule against bias (nemo index causa sua) and the right to fair hearing (audi atteram partem). In simple terms, the duty to act fairly was fragrantly disregarded by BOU. The directors and shareholders hadn’t feigned bankruptcy that they couldn’t recapitalise a bank, consecutively ranked number 1.
The refusal by BOU to give a loan of 100 million dollars to Dr Sudhir despite having valuable Securities such as Munyonyo Speke resort, Kabira Country club greatly ignored this rule for no explanation was given by BOU for refusal of the loan.
All the above narrated, is a clear testimony of determination by “mafiosos” to humiliate and frustrate Dr Sudhir who employs over 7000 people, pays over 18bn in tax to URA and over 300M to NSSF.
Such schemes dent the future possibilities of attracting more sound investors and eventually hamper economic growth and development of our economy.
It is my prayer that a deep audit as ordered by COSASE and the committee’s report find a more robust solution to this saga as the consequences are most likely to drain tax payer in paying Dr Sudhir. An out of court settlement as ordered by commercial court is worth embracing.
Kagenyi Lukka is a current affairs analyst.