High Court sets date to decide Sudhir petition

The central bank accuses Mr Sudhir of fraudulently taking depositors’ money from Crane Bank for personal gain and refusing to remit more than Shs52b in workers’ contributions to National Social Security Fund, a private sector workers pension fund. FILE PHOTO

What you need to know:

  • The central bank later sold Crane Bank to Dfcu Bank in January this year. On July 13, Bank of Uganda opened a suit against Mr Sudhir and his Meera Investments seeking to recover about Shs400b that Mr Sudhir allegedly fraudulently extracted from Crane Bank.
  • It is also seeking to recover freehold land titles for the Crane Bank branches, general damages and costs of the suit.
  • The central bank accuses Mr Sudhir of fraudulently taking depositors’ money from Crane Bank for personal gain and refusing to remit more than Shs52b in workers’ contributions to National Social Security Fund, a private sector workers pension fund.

KAMPALA. Court has set December 21 to determine whether Bank of Uganda lawyers prosecuting the case against property mogul Sudhir Ruparelia over closure of his Crane Bank are guilty of conflict of interest in the matter.

Mr Vincent Mugabo, the registrar in the Commercial Division of the High Court where the case was filed, issued the notice for the ruling on the preliminary matter raised by Sudhir.
Mr Mugabo warned both parties that should they or their representatives fail to appear on the said date court will proceed to deliver its ruling in their absence. The court notice was issued on Tuesday.

Mr Ruparelia filed in court an application saying MMAKS Advocates and AF Mpanga Advocates who represent Bank of Uganda in the case of Crane Bank liquidation (takeover) have a conflict of interest because they were his lawyers before.
He argued that representing his seized Crane Bank in the case of Bank of Uganda against him amounts to a conflict of interest.
In his application, Mr Sudhir states that David Mpanga of AF Mpanga Advocates and Kanyerezi Masembe of MMAKS Associates are witnesses in his defence and therefore are not qualified to represent Crane Bank (liquidated), which has sued him.

He wants the lawyers disqualified from the case. He contends that if the two legal firms are allowed to handle the case, it will be breach of trust since they are already privy to information that can prejudice the trial.

In the same application, Mr Sudhir alleges that the two law firms carried out legal analysis for Price Water House Coopers which was contracted by Bank of Uganda to conduct an independent audit of Crane Bank.
In a joint defence, MMAKS Advocates and AF Mpanga Advocates deny that Sudhir has ever been their client.
They aver that Crane Bank, now on receivership, and Mr Sudhir are two separate entities and representing the former cannot imply they represented the latter even when he was a shareholder in the defunct bank.

“The claims of fraudulent extraction of monies by the 1st defendant [Mr Sudhir] from the Plaintiff [Crane Bank], which are subject of this suit, only came to light subsequent to and by reason of a forensic audit carried out by PWC after 20th October 2016 and were not known by anyone other than the 1st Defendant and his associates/co-conspirators prior to the issuance of PWC’s forensic audit report,” read the joint statement of defence by the law firms.

The two law firms separately swore affidavits in defence of their instructions by Bank of Uganda to defend Crane Bank in the case.
In the affidavit, Mr Ernest Sembatya, a partner at MMAKS Advocates, states that the issues raised by Mr Sudhir “are made by him, knowing them to be false and/or by reason of conflating Crane Bank Limited with himself”.

He says it is not up to Mr Sudhir to choose which law firm or lawyers to act for entities that sue him and it is the suing party’s right to have their matters handled by counsel of their choice.
“This application is a clear abuse of process and a sinister attempt by SR [Sudhir Ruparelia] to control which counsel will conduct this litigation against him with the hope that the contest will not be conducted by capable, ethical and incorruptible counsel of the 3rd and 4th respondents’ choice,” he says.

Mr William Kasozi, the managing partner of AF Mpanga Advocates on the other hand, says Mr Sudhir made many false assertions about “AF Mpanga Advocates in general and my partner Mr David F.K. Mpanga, in particular.”

On October 25, 2016 Bank of Uganda took over Crane Bank and suspended all members of its board, saying the then biggest indigenous bank was incurably drained financially and posed a systemic risk to the country’s banking sector.

The central bank later sold Crane Bank to Dfcu Bank in January this year. On July 13, Bank of Uganda opened a suit against Mr Sudhir and his Meera Investments seeking to recover about Shs400b that Mr Sudhir allegedly fraudulently extracted from Crane Bank.

It is also seeking to recover freehold land titles for the Crane Bank branches, general damages and costs of the suit.

The central bank accuses Mr Sudhir of fraudulently taking depositors’ money from Crane Bank for personal gain and refusing to remit more than Shs52b in workers’ contributions to National Social Security Fund, a private sector workers pension fund.