By Kagenyi Lukka
It is coming to three years ever since Sudhir’s Crane bank Limited was controversially closed and hurriedly sold away at only Ugx.200 billion. The facts are that Crane bank limited was closed on 20th October 2016 by Bank of Uganda and later sold to DFCU at a second hand price of Ugx.200 billion on 25th January 2017.
As day has followed night, what cannot be denied is the fact the whole exercise of this transaction was a classic display of modern day economic sabotage, self-aggrandizement, fraud and utter malice.
Obviously, the targeted loser was City property mogul, Dr.Sudhir Ruparelia the chairman of Ruparelia group which owned several businesses including Crane bank, Meera Investments, Crane management Services to mention but a few.
Bank of Uganda Deputy Governor Louis Kasekende and embattled ex-director for commercial bank supervision Justine Bagyenda came under spotlight because of the various suspicious roles they played in ensuring that Crane bank ceases.
Their suspicious roles in the crane bank scandal reached crescendo when reports about their stinking wealth and properties emerged. None of them has publicly accounted for how such properties were acquired.
The summary of this oddity was well calibrated down in the report by Parliament’s committee on commissions, statutory authorities and state enterprises (cosase) which concluded that there were no guidelines followed during the closure and sale of crane bank.
ILLEGAL TRANSFER OF SUDHIR’S PROPERTIES-BAD MOVE.
A total of 48 branches/properties formerly occupied by Crane bank Limited were wrongfully taken over and occupied by DFCU bank after undervaluing them at ugx.10 billion.
Conflicted City law firm Sebalu and Lule advocates advised (read misadvised) DFCU to enter into this venture without the consent of the property owner Meera Investments.
Legally, Crane bank did not own the banking halls where it operated from. The buildings were owned by Meera Investments (Land Lord) and as such, the two are different legal entities under the relevant laws.
This nullity bothered experts and in a leaked document titled Transfer of former Crane Bank household properties, dated May 8, 2017, “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” banking analysts say.
Industry experts further assert that the whole procedure was entangled with fraud as there was no consent from the Landlord (Meera Investment Ltd) before transferring the lease to another party.
Experts also wondered how ‘senior’ lawyers like Sebalu & Lule Advocates could have ignored such a very important aspects of law, causing such a bad move making dfcu to incur massive losses in billions of shillings.
DFCU TWISTS ITSELF, RETURNS SUDHIR’S PROPERTIES
A bad, bitter and sour deal this was!
I have argued in my previous articles that DFCU swallowed a crocodile (crane bank) and vomiting it will gradually involve numerous pains-more painful than labor pains!
Now in a twist of events, Dfcu Bank reversed its decision to acquire 48 disputed properties sold by Bank of Uganda following the collapse of Crane Bank.
In its 2019 annual report released on Wednesday October 16th, Bank of Uganda said dfcu Bank had opted out of the acquisition of the properties held under a Ruparelia Group subsidiary – Meera Limited.
“… dfcu in a letter dated September 12, 2019 communicated … its decision to exercise its option to rescind its interest in purchasing the 48 properties pursuant to clause 8.7 of the agreement,” the report, which touches a number of issues, including the court cases brought against the Central Bank, reads in part.
The report further said: “As part of rescinding of the purchase, dfcu will return to Bank of Uganda certificates of title for Meera Investments Limited properties and requires Bank of Uganda to pay to dfcu the net book value of the properties recorded in the assets and inventory compilation report as at October 20, 2016.”
Dfcu’s decision came after Bank of Uganda lost a case against former Crane bank owner Sudhir Ruparelia and Meera Limited.
In August, High Court Judge David Wangutusi ruled against Crane Bank in receivership and ordered Bank of Uganda to pay costs after it was proved that Crane Bank did not have the jurisdiction to sue since it was in receivership at the time the case was filed.
Furthermore, the judge stated that orders sought by BoU to have properties of Meera transferred were a nullity as majority shareholding in cbl was owned by foreigners who cannot hold freehold land under Article 237 of the Constitution and the Land Act.
DFCU’S UNREASONABLE COMPENSATION BILL
As explained in the foregoing, after DFCU indicated its intention to vacate the branches, the contestation on who, how much and why the bill should be paid has sprung up with DFCU demanding for a rooftop ugx.47 billion for the branches it acquired about two years ago at Ugx.10 billion.
Reports indicate that during a stormy board meeting at Bank of Uganda, the governor Dr.Emmanuel Tumusiime Mutebile stood his ground and argued that he does not see the need of compensating DFCU.
Sources further indicated that while the governor is against the compensation, another camp led by his embattled deputy Louis Kasekende is viciously pushing for the compensation, a move that has triggered rifts within BoU leadership.
In a nutshell, DFCU needs to pay for its sins other than trying to bill the central bank for the clumsiness of its conflicted lawyers of Sebalu and Lule.The tax payer who stands to finance such a deal doesn’t benefit from it.The reason is that at the time of taking over the branches, the relevant laws existed and made no provision for such an arrangement and therefore DFCU Ought to have thought twice about the advice of the lawyers.
The author is he next Ikiiki MP, a business man and a current affairs analyst.