Court summons BoU over Sudhir

Kampala. The High Court has summoned Bank of Uganda to defend itself against the new suit brought against it by property mogul Sudhir Ruparelia.
In the parallel suit Ruparelia filed against Bank of Uganda last Thursday, he accuses the central bank of breaching the Confidential Settlement and Release Agreement between the two parties.
In the summons, the court’s deputy registrar gave BoU 15 days to submit its defence against Ruparelia accusations.
“Whereas a counterclaimant (Mr Ruparelia) has instituted a suit against you upon the claim, particulars of which are set out in the copy of the counterclaim. You are required to file a defence in the court within 15 days from the date of service of summons on you in the manner prescribed under civil procedure rules,” the court summons read in part.
This newspaper understands that BoU was served the summons last Thursday, the same day Mr Ruparelia filed his counter-suit.

Terms and conditions
According to the Confidential Settlement and Release Agreement signed between Bank of Uganda and Ruparelia in March this year, both parties agreed that if the terms and conditions of pact were fulfilled, all impending civil or criminal proceedings and investigations or prosecution or any other administrative action against Mr Ruparelia or related parties would cease.
“This Confidential Settlement and Release Agreement is in full, complete and final settlement of all the claims that either party may have against the other and each of the BoU and CBL hereby fully and finally releases and forever discharges and shall refrain from instituting, directing, procuring, instigating or maintain all any actions, claims, sanctions (whether administrative, civil or criminal in nature),” the confidential agreement states.
It was also agreed that no party would sue the other, commence, voluntarily aid in any way or instigate prosecution against the other. It was agreed that the Directorate of Public Prosecutions (DPP) and the Attorney General would be bound by the confidential settlement agreement, not to take any action against Ruparelia.
However, last month BoU sued Ruparelia in the High Court seeking to recover from him about Shs400b he allegedly fraudulently took out of his former Crane Bank, now liquidated, clandestinely selling the bank’s shares to himself and fleecing the bank in false transactions and vouchers.
The central bank has also since written to the DPP to consider instituting criminal proceedings against Mr Ruparelia.
Mr Ruparelia says BoU’s actions as cited above constitute breach of the Confidential Settlement and Release Agreement.
In the parallel suit against BoU, he is seeking $8m about (about Shs28b) for alleged breach of the agreement.
Clause 12 of the Confidential Settlement and Release Agreement states that without prejudice to the immediately foregoing, should any legal or administrative proceedings of any kind ensue against Mr Ruparelia as defined in the agreement, the agreement stands violated and BoU shall immediately return to him the value of the settlement consideration in immediately available funds.
In the counter-suit, Mr Ruparelia also wants BoU to surrender certificates of title and release of mortgage for prime land/property on plot 18 M418 Nakawa Industrial Area and Plot 7 Parliament Avenue.

Details of the agreement
Further details of the confidential agreement signed between BoU and Ruparelia in March, show that the businessman had sought to repossess his Crane Bank upon clearing his debts with the central bank.
However, under the agreement, BoU insisted that if Crane Bank, now liquidated, was to be returned to Mr Ruparelia, it would not be licensed to conduct financial business within the provisions of the Financial Institutions Act (FIA).
“BoU shall upon of all the consideration from SR (Sudhir Ruparelia) set out in this agreement lift the state of receivership from CBL (Crane Bank Ltd) and shall return to SR or his nominees the ownership and control of the legal entity CBL… although expressly understood by all parties that the legal entity CBL shall not be licensed to conduct financial institution business within the meaning of FIA,”,” the confidential agreement reads in part.
It was also agreed that Mr Ruparelia was to change the Crane Bank name and completely remove the word “bank” in the new name.
“As first order of business, change its name to remove the word Bank or any derivative as well as amend its memorandum and articles of association to remove all reference to Financial Institutions Business in the objects or elsewhere,” BoU further demanded under the agreement.
However, Mr Ruparelia’s repossession of Crane Bank was contingent on him paying $8m (about Shs28b) to BoU within 30 days from the date of the agreement on March 20.
He was further required to pay BoU $10m(Shs 36.09b) within 90 days from the date of the agreement. The balance of $ 42m (Shs151.6b)would be paid by way of transfer to BoU of real property of equivalent market value.
The market value of the real property was to be reached by a joint valuation of the two parties who would appoint one valuer each within seven days from the date of execution of the agreement.
Mr Ruparelia was to identify and supply a list of properties which were free of encumbrances and whose collective value would match the required money under the confidential agreement and the properties were to be submitted to BoU at the date of execution.
The list of properties picked out by Mr Ruparelia would then be subjected to the joint valuation process to determine the agreed value of the assets.
It was further suggested that in case of a disagreement on the joint valuation of the properties, the matter would be referred to a mutually acceptable third party valuer.
“Immediately upon receiving the list of settlement titles from the joint valuation team, SR (Sudhir Ruparelia) shall hand over the duplicate certificates of titles and the dully sealed/executed and witness transfer deeds in respect thereof to BoU and BoU shall be at liberty to place the same on market for the sale to recover the balance outstanding on the settlement consideration,” BoU and Ruparelia agreed.