The Commercial Court in Kampala, has this morning of August 26th, dismissed a multibillion commercial dispute that had been filed against city property mogul, Sudhir Ruparelia by Crane Bank in receivership, ending a two-year legal battle.
In a landmark ruling, the head of the commercial court, Justice David K Wangutusi, noted that Crane Bank (in receivership) being a foreign owned bank cannot own freehold land in Uganda and therefore has no legal basis to sue for land it cannot own.
The judge went on to dismiss with costs, the case HCCS 493 of 2017, in which Crane Bank (in receivership) alleges that the businessman fraudulently took up to $92.8m (about shs334b) and another shs 8.2 billion of depositors’ money from crane Bank for personal gain.
“Furthermore, It’s also my finding that the property the plaintiff was seeking when she filed the suit on June 30th 2017 had earlier been given away by the receiver to Dfcu bank on 24th January 2017, four days into receivership and five months before filing of this suit this leaving the plaintiff/ respondent with no property,” the court ruling reads in part.
The lawyers of Crane Bank accused Mr Ruparelia of taking Shs397b out of the financial institution in what they called fraudulent transactions and land title transfers.
However, Sudhir Ruparelia through his lawyers argued that when Crane Bank went into receivership, it lost its powers to “sue” and to “be sued”, rendering its suit against him and Meera Investments Company, a nullity.
Justice Wangutusi further ruled that in any case, BoU had already given away the suit land to dfcu bank.
What this ruling means
Dfcu Bank had incidentally transferred the Meera Investment land into its names on the advice of their lawyers Sebalu & Lule Advocates, an act many legal minds have deemed premature as they will now have to face extra costs to re transfer the land back which comes with associated suits for rent arrears and interest accrued.
Sudhir says the transfer is an “illegality”, a “fraud” and tantamount to “trespass” on his property. The lands commissioner on the other hand was sued for “illegally effecting a transfer of the suit properties into the names of dfcu.”
However, dfcu in a defense filed on 28th January 2018 by Sebalu & Lule Advocates, argued that “ownership of these properties is still subject to a court decision in High Court Civil Suit No. 493 of 2017 and therefore it was premature for Meera to claim them.”
Speaking to the media after the commercial court dismissed the suit, Ruparelia Group Chairman, Dr Sudhir Ruparelia, said that, “Everyone who has played a part in the fraudulent activities is going to pay for it – we are not going easy. That includes dfcu that is fraudulently occupying Meera Properties; they are the biggest fraudsters in this country. They need to understand that they are illegally occupying our branches and they fraudulently transferred them into their names without the consent of Meera Investments.”
“We are now going to put up a counter claim. You know COSASE found out a lot of things of what these people did. With guidance from my lawyers, we will put a counter claim,” Sudhir said.
Sudhir also said noted that this was a big win over the whole consipracy within the central bank.
“This is a big win over the mafias and the whole conspiracy that’s been holding the country at ransom in the central bank. I think this is going to be a lesson to them. They have taken over 7 banks and they cannot account for any of them. How do you fail to account to some one?” – Sudhir wondered!
Adding that, “You steal all my assets, all my paid-up capital, and all my assets just stolen – and you claim that you put this money in Crane Bank and you can’t even account for it, you can’t even account for Shs 290 Billion – where is it all gone?”
Crane Bank was the fourth-largest commercial bank in Uganda licensed and supervised by BoU as at the end of 2015. It started operating in August 1995 offering corporate and retail services. The bank focused on micro, small and medium-sized businesses.
In September 2012, the bank acquired assets and some liabilities of the National Bank of Commerce, indigenous financial service providers in Uganda that had lost its banking license.