Court overrules BoU on Greenland Bank closure
The Solicitor General has written to Bank of Uganda (BoU), demanding to know why Cooperative Bank was sold in a controversial deal that has been questioned by the Auditor General and Parliament.
What you need to know:
- The Central Bank had sought court powers to dismiss the main case filed by 31 aggrieved shareholders of former Greenland Bank by way of raising a preliminary objection.
The head of the Commercial Division of the High Court, Justice Stephen Mubiru, has overruled the objections raised by Bank of Uganda (BoU), that were aimed at prematurely disposing of the liquidation case of Greenland Bank on technicalities.
Justice Mubiru’s decision now means the one-year-old case will be heard on its merits before the final decision can be made at a later date.
The facts of the application were that BoU had sought court powers to dismiss the main case filed by 31 aggrieved shareholders of former Greenland Bank (now in liquidation) by way of raising a preliminary objection.
The preliminary objection was to technically dispose of the matter in its early stages without hearing it on its merits to its logical conclusion.
Core to the preliminary objection by BoU was that the main case filed by the aggrieved led by Mr Sulaiman Kaweesi, was filed out of time, and that it should be struck out.
Citing the law, BoU had argued that the matters complained about by the shareholders, occurred between 1999 and 2007, hence a period of 15 years had lapsed, yet the law demands that if one is to seek redress in such matters, the same should be done within a period of six years.
But shareholders’ lawyers had argued that their clients’ case was not barred by time on grounds that upon Parliament’s Committee on Commissions, Statutory Authorities (Cosase) unearthing the alleged fraud by regarding the liquidation process of Greenland Bank by the Central Bank, in 2018, the limitation periods started running at that time, hence they are within the six-year time frame.
In his decision dated January 17 that was delivered electronically, Justice Mubiru sided with the shareholders of Greenland Bank, reasoning that certain facts like the time of when liquidation started, were still contested, hence the matter should be heard to its logical conclusion.
“Establishing the actual dates of the alleged illegal or wrongful conduct consisting a failure to account, is a prerequisite to determination of when the cause of action accrued. Its a matter that cannot be determined without hearing,” ruled Justice Mubiru.
BoU had argued that the liquidation process of Greenland Bank started on April 1, 1999 and ended on November 5, 2007 when it was sold to M/S Nile River.
The Cosase probe was triggered by a 2017 forensic audit report by the Auditor General, which raised several irregularities during the controversial sale of several commercial banks by BoU.
Some of the sold banks include Teefe Trust Bank, Crane Bank, International Credit Bank Ltd, Greenland Bank, Uganda Co-operative Bank, National Bank of Commerce, and Global Trust Bank.
Background
The shareholders of Greenland Bank in their main suit now pending before court for determination, contend that the continued liquidation of their bank by BoU for more than 21 years without accountability to them, is irregular, unreasonable and in bad faith.
They want court to direct the Central Bank to fully account to them for the over 21 years it has been in the process of liquidating their bank that commenced on April 1, 1999 to date.
Further, the shareholders want court to declare that the properties that belonged to them like Plot 30 on Kampala Road and Plot 66 on William Street; were sold below the market value and that the said sale was irregular.
