Bank of Uganda says dfcu bank is giving back the 48 properties that belong to Meera Investments Ltd owned by businessman Dr Sudhir Ruparelia.
This revelation is contained in a Bank of Uganda annual report for the financial year 2018/19.
A similar development was reported recently but dfcu bank dismissed it as a hoax.
Yet BoU Governor Emmanuel Tumusiime Mutebile in the report released Thursday said dfcu Bank had indicated to the central bank that they will exit the properties in the wake of a legal suits.
The said suits saw city Sudhir come out as the winner forcing dfcu bank to change its mind.
According to the report, as part of rescinding of this purchase, dfcu will return to BoU certificates of title for Meera Investments Limited properties.
The bank asked BoU to pay to dfcu Bank Limited the net book value of the properties recorded in the assets and inventory compilation report as at October 20, 2016.
As such, BoU will pay dfcu Bank Shs48bn as a result of the failed transaction.
The report confirms the earlier report saying dfcu Bank was de-commissioning some of the branches housed in the properties under dispute.
In September this year, DFCU bank wrote to the Bank of Uganda trying to set up a meeting to iron out modalities of handing over of Meera Investment Limited (MIL) properties that had been possessed by DFCU when it bought Crane Bank in 2017.
The properties had become a burden to DFCU and it had reached a point where it did not want to incur the heavy costs of occupying them.
In a letter to Bank of Uganda, DFCU’s managing director Mathias Katamba noted that the legal setback suffered by BOU on August 26 had put it (DFCU) in a precarious situation regarding the assets of MIL.
“In line with its strategic interests and risk management framework the board has resolved that it is in the best interest of the bank to exercise the option to rescind the purchase of the MIL properties,” Katamba wrote in a letter dated September 12, 2019.
The letter was co-signed by Agnes Mayanja, the Chief Risk Officer of DFCU.
It is now believed that this letter and a series of other events led DFCU to seek the services of a consultant to help them come up with a relocation plan from 22 properties that belong to Meera Investments Limited, which is part of the Ruparelia Group of Companies.
Meera Investments had sued DFCU demanding unpaid rent arrears in billions of shillings.