Members of Parliament sitting on the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) identified what they termed as shareholding irregularities in their probe of defunct banks.
One such concern was that Rasiklal Kantaria (“Kantaria”) a prominent Kenyan Banker, is said to had owned 47% of CBL through White Sapphire Limited (“White Sapphire”).
This would make him the biggest single shareholder in the Bank. However, Bank of Uganda was concerned that Kantaria’s actions and inactions were not consistent with a person with such a large shareholding.
Of the UGX 36B of dividends paid to Kantaria or White Sapphire since 2006, the trace found that dividends for all but one of those years, (78% of all dividends), back to Ruparelia Group companies and associates, or to internal CBL accounts.
In July 2017, Bank of Uganda filed a suit against Sudhir Ruparelia and Meera Investments Ltd to recover over Shs400bn and 48 land titles held under his subsidiary Meera Investments.
In February 2018, Dr. Sudhir, under his Meera Investments also sued DFCU for illegally occupying 46 branches across the country that formerly belonged to Crane Bank Limited.
While appearing in parliament Thursday, dfcu bank officials were asked on the subject of Branch premises that CBL held leasehold tenures in the properties for which Meera Investments holds freehold interests.
dfcu officials explained that the matter is before court and can therefore not be discussed at length.
As of 31 December 2015, Crane Bank’s assets were UGX:1.81 trillion, with shareholders’ equity of UGX:281.43 billion. In October 2015, it had more than 750,000 customers.
In September 2012, Crane Bank acquired the assets and some of the liabilities of the National Bank of Commerce, a small, indigenous, financial services provider in Uganda that had lost its banking license.
On 27 January 2017, DFCU took over the bank, which had been under the statutory management of the BOU because the bank’s liabilities exceeded its assets.
The acquisition included all customer deposit accounts and loan accounts. The bank was previously a member of the Ruparelia Group.
Who owned Crane Bank?
In its November 2016 article, Daily Monitor reported that Crane bank was owned by a number of shareholders.
According to copies of the Memorandum of Association and Articles of Association obtained from the Uganda Registration Services Bureau (USRB) by the newspaper, showed the bank had a total share capital of Shs210b.
According to documents dated June 21, 2013, Sudhir Ruperelia and his family are the largest shareholders in Crane Bank with a 48.7 percent stake.
Under this shareholding structure, Sudhir Ruperelia owns 28.83 per cent of the shares in the bank.
His wife, Jyotsna Ruparelia owns 13.8 per cent of the shares in the bank. She was also serving as a board member of the bank.
His three children, Ms Sheena Ruparelia, Ms Meera Ruparelia and Mr Rajiv Ruparelia own 1.99 per cent shares each. That gives his family the controlling interest in the bank.
Sudhir’s shareholding in Crane Bank has been reducing over the years. In 1995, when the bank started operations, Sudhir personally controlled 44.3 per cent of the bank.
Ms Jyotsna Ruparelia, his wife at the time also owned 22 per cent. That gave the Sudhir family total 66.3 per cent ownership of the bank.
Some of these shares have since been transferred to his children and the majority shareholder, Mr Rasik Kantaria.
47.33 per cent – Mr M/s White Sapphire
M/s White Sapphire is the single largest shareholder in Crane Bank with 47.33 per cent of the shares.
In previous documents, these shares were held by a company known as Mr Rasik Kantaria. Documents did not show when those shares were transferred to M/s Sapphire, a long-serving member of the Crane Bank board.
Kantaria is a Kenyan based businessman who is the founder and chairman of Prime Bank in Kenya, a tier three financial institution.
The bank was founded in 1992. Prime Bank also has subsidiaries in Malawi, Botswana, and Mozambique.
Just like Sudhir, Kantaria also has investments in real estate, manufacturing and tourism. Through Kenyan based sources, Kantaria was not available to comment on the operations of Crane Bank.
In the documents at the registry, M/s White Sapphire is domiciled in Mauritius. There is no further disclosure on what this company does and who owns it.
Incorporated in November 2011, the Mauritius Central and Business Registration Integrated System, White Sapphire carries out global business. The registered address for White Sapphire, Associated Consultants LTD, is linked to another 253 businesses in Mauritius.
4 per cent – Mr Jitendra Sanghani
He is listed as a London-based businessman. Using the Companies House and Company Check tools for UK registered business did not come up with a Jitendra Sanghani who owns a business at the listed address in the Crane Bank documents.
Tom Mugenga – 0.003 per cent
Mugenga is originally from Kisoro and now runs business both in his home district and Kampala. He has been a board member of Crane Bank since its inception in the 1990’s.
He is involved in the clearing and forwarding business, real-estate and agro-processing.
Crane Bank documents do not disclose any sort of transfer of shares that happened when the Sudhir Ruparelia family reduced his stake in the bank in 2010, 2011 and 2012.
Dividends to shareholders
Company documents indicate that shareholder dividends started only being paid in 2004.
The bank started official operations in 1995 and since 1997 it had been profitable until the troubles of 2015 when it made a loss of Shs3.3b.
In total, since 2004, Crane Bank shareholders got a dividend pay-out totalling Shs119.41b.
In 2015, due to the loss the bank incurred, the board did not recommend any dividend payout to shareholders for the first time since 2004.
Since 2004, the company had generated total after tax profit of Shs392b.