Dr. Adam Mugume, the Executive Director, Research at Bank of Uganda (BoU) has revealed that the Central Bank is still in talks with property mogul Sudhir Ruparelia for an out-of-court settlement in a case the Central Bank sued the former Crane Bank owner over mismanagement.
“There’s a cabinet decision not to prosecute him (Sudhir),” Dr. Mugume (in featured photo) said.
He however said if mediation talks with Sudhir fail, BoU will be left with no option but take on the tycoon in the courts of law.
He made the remarks on Saturday while appearing before Capital FM’s ‘Capital Gang’ show.
It should be noted that on July 13, 2017, Bank of Uganda opened a suit against Sudhir and his Meera Investments Company, seeking to recover about Shs400b that he (Sudhir) allegedly extracted from Crane Bank. BoU is also seeking to recover freehold land titles for the Crane Bank branches, general damages and costs of the suit.
But in his defence, Sudhir denied any wrongdoing in a Shs397bn case in the Commercial Court. He also denied responsibility for the collapse of the bank which was taken over by Bank of Uganda (BoU) and liquidated to dfcu bank in October last year.
The Head of Commercial Court judge, David Wangutusi advised both parties to seek for an out-of-court settlement before it was too late.
However, in a counter suit, Sudhir asked BoU to drop its lawyers, MMAKS Advocates and AF Mpanga Advocates over conflict of interest.
He also rejected mediation talks unless BoU dropped the law firms in question. BoU obliged and dropped the lawyers in mediation talks.
The Central Bank contracted Sebalu, Lule & Co. Advocates to represent them in the Crane Bank case for mediation purposes, but still Sudhir says the law firm is conflicted.
Mugume’s remarks come at a time when the recently released Parliamentary Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) report on the controversial closure and sale of seven defunct banks by Bank of Uganda (BoU) says the Central Bank closed Crane Bank illegally.
The investigations followed the special audit report by the Auditor General that raised a number of queries in the manner the banks were closed and sold.
The seven banks in question include Teffe Bank, International Credit Bank Limited, Greenland Bank, Co-operative Bank, National Bank of Commerce (NBC), Global Trust Bank and Crane Bank Limited.
In its recommendations, the report reads: “The committee finds that BoU’s failure to observe principles of financial prudence and in the course breaching their statutory duties provided under the FIA thereby financially disadvantaging CBL, it should make good the loss occasioned to the commerciality fair extent of the value of the Bad Book.”
It adds: “BoU having failed to value the assets and liabilities of GTB, NBC and CBL and considering the lapse of time and impossibility in revaluation of assets should address the probable financial loss occasioned. BoU officials who failed to properly execute their duties in accordance with the law should be held responsible for their commissions and/or omissions.”
