The Bank of Uganda (BoU), the regulator of Uganda’s banking sector is increasingly being put under scrutiny.
With the ongoing legal battle between BoU and real estate mogul and founder of the defunct Crane Bank, Sudhir Ruparelia, Amos Nzeyi, one of the shareholders and former chairperson of National Bank of Commerce (NBC) has dragged BoU to Commercial Court for allegedly wrongfully closing his bank (NBC) in 2012.
The assets of the bank were later sold to Crane Bank that also collapsed last year after becoming ‘significantly undercapitalized’.
Nzeyi alleges that NBC’s financial health had stabilised by the time BoU closed it and now wants court to hold BoU for alleged failure of supervising the banking sector.
Through his lawyers, Muwema and Company Advocates, Nzeyi says that BoU conspired with Crane Bank to NBC assets secretly within a record six hours; a thing he says is against the Financial Institutions Act, 2004.
In the same suit, Nzeyi sues Sudhir, his business partner Chhotalala Kantaria and Crane Bank.
In a 25-page lawsuit filed on Tuesday, Nzeyi claims that by the time of takeover, winding up, liquidation, closure and sale of NBC by BoU, the bank was not an insolvent financial institution since it (NBC) had just undertaken an expansion programme-acquired and refurbished its new headquarters on Yusuf Lule road in Kampala for about US$1.8m.
This comes a few days after lawyers representing Sudhir wrote to BoU asking for 26 documents to enable him come up with his defense in the Shs397bn case that BoU brought against East Africa’s richest man.
