The Chief Executive Officer of Arise Holdings Ltd, which is DFCU Bank’s biggest shareholder, has resigned from the bank’s board of directors, throwing the future of the financial institution following it’s controversial takeover of Crane Bank into more turmoil .
Mr Deepak Malik’s resignation, which was issued in a letter to the DFCU board on Friday, comes days after the Commonwealth Development Coorporation (CDC), Britain’s oldest development finance institution, chose to opt out of it’s investment arrangement in bank.
Arise Holdings has 58 percent shares while CDC is DFCU’s oldest investor after jointly setting up the the bank with the Government of Uganda in 1964. CDC’s latest move comes in the aftermath of the fall out from her partner’s takeover of Crane Bank with the transaction attracting industry scrutiny over transparency issues and it’s European shareholders in the spotlight.
According to information available, CDC on June 14 has notified the DFCU Board and other shareholders that they would sell their stake.
DFCU Chairman Elly Karuhanga has on Friday July 6, confirmed that DFCU is having an investor’s revolt. The bank is in trouble following controversial takeover of Crane Bank which has been condemned as massive fraud (FILE PHOTO)
CDC’s Investment Director Irina Grigorenko, said it was “undertaking a review of its investment in DFCU Limited which may lead to the disposal or some of some or all of its shares in DFCU over the short to medium term.”
“After being a shareholder for half a decade, it is our aspiration to exit in a manner that causes minimum disruption to the business and ensures the orderly trading of DFCU’s shares,” Grigorenko was quoted by the British Press.
Grigorenko also indicated that CDC’s objective is to identify “like-minded investors who could support DFCU in its new phase of growth.”
It is believed that the CDC exit, a major industry blow for the DFCU has been precipitated by the bank’s controversial acquisition of Crane Bank Ltd. It is said that after Crane Bank Ltd shareholders protested the takeover of branches by DFCU, it unsettled the board after CBL insisted that branches weren’t part of the bank as they fall under Meera Investments Ltd . CDC and two other partners opposed the deal and accused DFCU bosses especially the Managing Director Mr. Juma Kisaame for not carrying out enough due diligence. The British investor has now acted
DFCU has in recent months been battling former Crane Bank shareholders over property worth millions of dollars.
The dfcu bank acquired Crane Bank, the then 4th largest bank on February 27, 2017 at a fee later to be discovered as a paltry Shs 200 billion. However Former Crane Bank shareholders led by majority shareholder Sudhir Ruparelia and family have dragged the Bank of Uganda (BoU) to court, claiming their bank was sold to dfcu without considering their interests in accordance with the Financial Institutions Act.
