Bank of Uganda sued for failing to supervise Crane Bank
The former Crane Bank Headquaters on Kampala Road. Photo by Colleb Mugume
A citizen has sued Bank of Uganda for failing to properly supervise the business of Crane Bank Limited, a fortnight after the central bank dragged businessman Sudhir Ruparellia and Meera Investments Limited to court for alleged fraud. The central bank is seeking to recover at least Shs397b from the two defendants.
Mr Derrick Nsereko, a resident of Kampala today filed civil suit number 362 of 2017 through his lawyers, Kashillingi, Rugaba and Associates against Bank of Uganda seeking a declaration that it failed to properly supervise the business of Crane Bank Limited (CBL) in accordance with the Financial Institutions Act, and for the years 2013 to 2016 shied away from taking corrective action in respect of CBL’s financial affairs hence putting depositors’ funds at risk.
Nsereko also claims that the central bank, “acted in bad faith, negligently and in breach of duties in giving the bank a clean bill of health” and that its unidentified officers failed to oversee the bank, inattention for which they must be held culpable.
Bank of Uganda in 1995 licensed Crane Bank to carry out business of a financial institution, only to shut its operations and sell it to dfcu in 2016.
The development also comes after shareholders of the National Bank of Commerce indicated, in a letter to the deputy registrar, commercial division of the High Court on July 17, that they are interested in the case file to explore the possibility of joining the suit or lodging a separate suit altogether. Mr Amos Nzei and Bishop Richard Ruchirande, two shareholders of NBC in a letter by their lawyers, Fred Muwema, John Mary Mugisha and Severino Twinobusingye asserted that they believe the rush take over, winding up, liquidation, closure and sale of NBC to Crane Bank without following the due process of law is a continuation of and/or part of the fraud orchestrated by Crane Bank and its proprietor, the subject of the suit.
In September 27, 2012, BOU sold NBC’s assets to CBL and in November 2016 when the central bank moved to sell Crane Bank to dfcu, shareholders of the bank, owned by among others, former prime minister Amama Mbabazi, retired Supreme Court Justice Prof George Kanyeihamba and businessman Amos Nzei challenged the process in vain, citing a pending constitutional court petition challenging the closure of their bank.
Mr Nsereko’s suit now puts the central bank’s action and inaction in focus.
