Big Story

Victory for Sudhir as BoU withdraws Appeal in Crane Bank case, agrees to Cough Billions

KAMPALA, UGANDA: Business mogul Dr. Sudhir Ruparelia is in a celebratory mood as his long-fought court battle against Bank of Uganda in the sale of the now-defunct Crane Bank nears conclusion.

As you read this now, the Bank of Uganda (BoU) this week decided to withdraw a Supreme Court appeal that was contesting the Court of Appeal’s dismissal of the case filed on behalf of Crane Bank Ltd (in Receivership) vs. Sudhir Ruparelia and Meera Investments Ltd.

In a notice of withdrawal dated September 15 that this website has seen, the Supreme Court Registrar indicates that BoU has decided not to prosecute the appeal and will pay all costs due for the case.

“Take notice that the Appellant does not intend further to prosecute the appeal,” reads part of the notice.

This development follows another win for Sudhir in early August when the Supreme Court dismissed an application in which Bank of Uganda had sought permission to amend the memorandum and record of appeal before hearing the appeal in the Crane Bank case.

BoU in the same notice agreed to meet costs incurred by Sudhir and his Meera investments as the multibillion case comes to a conclusion.

“The appellant (BoU) will pay the costs of the appeal and in the courts below to the respondents (Sudhir Ruparelia and Meera Investments ltd),” BOU further said. The costs are understood to be in billions of shillings.

Notice of withdrawal of the appeal communicated by the Supreme Court Registrar on September 15

The withdrawal notice was signed by Bank of Uganda lawyers Messers Byamugisha & Co Advocates, confirming the latest victory for Businessman Ruparelia who has given the BOU a run of their money in the court, ever since they closed his bank. On June 23, 2020, the Court of Appeal upheld the judgment of the Commercial Court in an application filed by BoU seeking a refund of UGX 397 billion from city tycoon.

ALSO READ:   Grief as Catholic priest is murdered over land conflict

Background of the case

The genesis of the matter started in 2016 when Bank of Uganda took over Crane Bank citing undercapitalization and the bank was later acquired by DFCU in January 2017. The Central bank then filed a case on behalf of Crane Bank (in receivership) against Crane Bank Vice Chairman Sudhir Ruparelia and Meera Investments for allegedly siphoning money out of the bank. BoU lost the case as it was thrown out on grounds that a bank in receivership cannot sue or be sued according to the Financial Institutions Act (2004). BoU filed an appeal in the Court of Appeal which it lost.

In his first ruling, Justice David Wangutusi of Commercial Court in August 2019 dismissed the first case in which BoU claimed that Ruparelia and his Meera Investments Ltd fleeced his own Crane Bank Ltd (now in receivership) of UGX397 billion.

The judge ruled that this rendered Crane Bank in receivership incapable of suing or being sued since there would be no assets to be claimed for.

Court noted that the public notice made it clear that BoU as the receiver had done an evaluation of the respondent (Crane Bank in receivership) and arranged for the purchase of its assets and assumption of its liabilities by another financial institution.“

ALSO READ:   Speke Resort Munyonyo slashes rates in new Wedding Bonanza, you can't afford to miss it

The Central Bank then ran to the Supreme Court and filed an appeal and went further to file an application to substitute Crane Bank Limited (in receivership) with Crane Bank Limited (in liquidation), saying it is still a licensed financial institution under resolution and the Financial Institutions Act.

BoU’s application was denied with the Supreme Court Justices noting that the amendment of the appeal by substituting of the parties or entities will fundamentally affect the appeal even before it is heard, adding that granting BoU’s application would in effect introduce a new party to the appeal, which was non-existent at the time of filing the suit.

A panel of the Supreme Court Justices including Ruby Opio-Aweri, Faith Mwondha, Lillian Tibatemwa, Ezekiel Muhanguzi and Night Tuhaise, in a ruling issued on August 12 rejected arguments by BoU lawyers led by veteran attorney Dr. Joseph Byamugisha, reasoning that Crane Bank Ltd (in Receivership), Crane Bank Ltd (in Liquidation), and Crane Bank Ltd are three distinct entities with different rights, powers, and obligations.

In his [BoU] notice, he specifically stated that the liabilities of the respondent had been transferred to DFCU Bank Ltd and that because DFCU Bank had taken over the liabilities, it would, by way of consideration, be paid by conveying to it the respondent’s assets,” the judge ruled. Bank of Uganda, through their new attorney Dr. Joseph Byamugisha of Byamugisha & Co Ltd the chose to file an appeal.


Do you have a story in your community or an opinion to share? Email us on: [email protected] Or Click Here join the Daily Express WhatsApp Group or join our Telegram Channel here to stay up-to-date.

Comments
To Top
Translate »