Crane Bank takeover fight rages on
The building that used to house Crane Bank on Kampala Road. FILE PHTO
What you need to know:
- In their unanimous decision, the Supreme Court justices held that it was BoU that was behind the Shs397b commercial litigation against the businessman and not Crane Bank in receivership.
The fight between the Central Bank and the lawyers representing Meera Investment Ltd and property mogul, Mr Sudhir Ruparelia involving the takeover of Crane Bank, is yet to end despite the recent Supreme Court ruling, ordering Bank of Uganda to foot all the legal costs incurred by the businessman.
On February 11, the Supreme Court, which is the highest court in the land, ordered BoU to foot all the legal costs involving the Shs397b multi-billion cases that Crane Bank in receivership had brought against city businessman Sudhir Ruparelia and his construction company Meera Ltd, bringing the five-year litigation to an end.
In their unanimous decision, the Supreme Court justices held that it was BoU that was behind the Shs397b commercial litigation against the businessman and not Crane Bank in receivership.
However last Friday, the central bank in a statement stated that prior to the recent Supreme Court order, Crane Bank in receivership had filed an application for review of some of its findings.
According to BoU, the said application has not yet been heard and its outcome could majorly impact on the final orders.
“Prior to this recent Supreme Court decision, Crane Bank Ltd in receivership and Bank of Uganda had in October 2021, filed an application before the Supreme Court for review of its findings. One of the grounds of that application relates to the interpretation and application of the repealed/ substituted section of the Financial Institutions Act, 2004,” BoU’s statement read in part.
“That application is yet to be heard and disposed of by the Supreme Court. The determination of that application is critical in guiding the Bank of Uganda in implementing the court decisions. We are following up with the court to have this application fixed for hearing.” the statement further read.
Reacting to the said statement, Counsel Joseph Matsiko, one of the lawyers representing Meera Investment Ltd and Mr Ruparelia, said since the main appeal has been dismissed by the Supreme Court, BoU can not claim of a pending application for review.
“You cannot talk of an existing application for review when the main appeal has since been dismissed. This is misconceived and unfortunately, as they prolong this legal matter, it’s the tax payers to bear the consequences,” Counsel Matsiko said by telephone at the weekend.
Also in the unanimous judgment of the Supreme Court on February 11, the justices ruled that Crane Bank reverts to the shareholders as of January 20, 2018.
The justices included; Rubby Opio-Aweri, Faith Mwondha, Prof. Lillian Tibatemwa, Ezekiel Muhanguzi and Percy Night Tuhaise.
Background
The facts arising to this case are that Crane Bank was licensed by BoU to carry out business of a financial institution.
On October 20, 2016, Crane Bank was placed under statutory management by BoU pursuant to Sections 87 (3) and 88 (1) of the Financial Institutions Act as it was under capitalised.
The Central Bank pursuant Section 94 of the Financial Institutions Act, placed Crane Bank under receivership with some of its assets and liabilities sold to Dfcu Bank.
On June 30, 2017, Crane Bank in receivership filed a commercial case before the High Court, Commercial Division in which it was seeking to recover over Shs397b from the businessman, which he allegedly misappropriated as the director and shareholder with his Meera Investment Company.
On August 29, 2019, then presiding judge, David Wangutusi, delivered his ruling in which he dismissed the multibillion commercial dispute on grounds that Crane Bank in receivership lost its legal powers to “sue” Mr Ruparelia or “to be sued”, the moment it was placed under receivership.
Crane Bank in receivership was dissatisfied with the decision of the Commercial Court and lodged an appeal before the Court of Appeal.
A panel of three justices led by then Deputy Chief Justice (Alfonse Owiny-Dollo, now Chief Justice), also dismissed the appeal and upheld the ruling of the Commercial Court.
But still being dissatisfied with the decision of the Court of Appeal, Crane Bank in receivership, has appealed to the Supreme Court and along the way before the appeal could be heard on its merits, Crane Bank in receivership, withdrew the appeal notice.
It’s upon this basis that the same court on February 11, ruled that BoU should then foot all the legal costs that the businessman has incurred from the High Court to the Supreme Court.
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