By Kagenyi Lukka
They say that the days of a thief are 40. This is true to the current scenario emerging from the way Bank of Uganda sold off Crane Bank to DFCU in 2017.
The mystery is not only limited to the sell, but it goes to the root of how Meera Investment property, which Crane Bank Ltd was leasing at the time it was sold to DFCU, and how these property was transferred.
It has now emerged that a renowned law firm Sebalu & Lule Advocates misled DFCU. Actually, it provided the wrong legal advice to DFCU, and the Bank fraudulently transferred leasehold titles from Carne Bank to DFCU Bank.
Crane Bank Lt had released 49 branches from Meera Investments Lt, the landlord, to operate its banking business in Uganda.
The law, in particular, the Financial Institutions Act, does not allow banks to invest in business for fear of conflict of interest with their clients.
Therefore, it was viable for Crane bank to minimise on rent costs that are incurred by other banks.
By law, the Registration of Titles Act (RTA), a lessor must get consent from the landlord before transferring the lease to another party. This is rooted in the fact that ownership belongs to the landlord under a lease agreement, and you cannot transfer or sell without the consent of landlord.
It is therefore mindboggling that senior lawyers operating under Sebalu & Lule Advocates ignored such a very important fact of the law?
The lack of consent of the landlord, by any standard, nullifies all procedures in the transfer of Meera Investment property and land to DFCU. Even a first year law student at Makerere University School of Law would make a better analysis of these events.
So, why did Sebalu & Lule misguide? Why did DFCU transfer property that does not belong to them into their names?
While court is yet to decide on the matter of ownership of the said property, it has emerged that the property belongs to Meera Investments, owned by Sudhir Ruparelia.
It is also clear that the majority hareholder are in Mauritius registered as White Sapphire Ltd, and by virtue of that fact, they cannot own freehold property. So, why did DFCU register the property in the bank’s names?
This is the contestable matter. It also is an illegal transfer, which was based on misleading legal advice by Sebalu & Lule Advocates.
Under the legal profession, we are told that lawyers are required by the Advocates Act to provide the right advise to clients or even go an extra mile to deliver the best interests of their clients.
Fraud, unethical behavior is also punishable by the Law Council and the Uganda Law Society.
So, why are these bodies silent despite the overwhelming evidence that Sebalu & Lule did not only mislead DFCU but also fraudulently acted in bad faith when it occasioned the transfer of Meera Investment property to DFCU bank names?
Is Sebalu & Lule Advocates Company still a company worth its salt? Should Ugandans trust this law firm anymore , given their fraudulently acts, which have in the recent past been exposed?
For instance, in a leaked document titled Transfer of Former Crane Bank household properties, dated May 8, 2017, it was stated that: “the law firm 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.”
“In light of the lengthy of time between the completion of date and when DFCU can vividly exercise the option to rescind the purchase of household properties, our recommendations is that the transfer be registered immediately,” the document stated.
Surely, what law firm is this? Do they even have lawyers? I heard that one of the main partners in Sebalu & Lule, Joseph Luswata is a senior lecturer of taxation, commercial law and business association at Makerere University School of Law.
If it is true that Luswata is a lecturer at Makerere University, then surely, our children are in danger? Why would such a person, Luswata, with all his expertise, give wrong advice to DFCU?
It is therefore appalling that Sebalu & Lule chose to give the wrong advice to DFCU when it is written on the wall that there was no consent from the Landlord (Meera Investment Ltd) before transferring the lease to another party.
This automatically nullifies the transaction and courts have already settled the law in the Supreme Court decision of Fredrick Zabwe v orient Bank that once fraud is cited in any transaction, such a transaction ceases to have any effect, and it is void and null.
For causing financial loss to DFCU and mismanaging the Crane Bank property, Sebalu & Lule Advocates should be penalized and its lawyers struck off the advocate roll.
The author is a current affairs analyst and aspiring MP Ikiiki County in Budaka District.