Who owns Crane Bank?

Copies of the Memorandum of Association and Articles of Association obtained from the Uganda Registration Services Bureau (USRB) have revealed the ownership of the troubled Crane Bank, currently under Bank of Uganda’s management.
Crane Bank through its annual reports or company website, had never disclosed the exact shareholding structure of the bank.
However, Daily Monitor has secured company registration documents that now reveal the shareholding in the bank. The bank has a total share capital of Shs210b.

Ruperelia’s family
According to documents dated June 21, 2013, Sudhir Ruperelia and his family are the largest shareholders in Crane Bank with a 48.7 percent stake.
Under this shareholding structure, Sudhir Ruperelia owns 28.83 per cent of the shares in the bank. His wife, Ms Jyotsna Ruparelia owns 13.8 per cent of the shares in the bank. She was also serving as a board member of the bank. His three children, Ms Sheena Ruparelia, Ms Meera Ruparelia and Mr Rajiv Ruparelia own 1.99 per cent shares each. That gives his family the controlling interest in the bank.
Sudhir’s shareholding in Crane Bank has been reducing over the years. In 1995, when the bank started operations, Sudhir personally controlled 44.3 per cent of the bank. Ms Jyotsna Ruparelia, his wife at the time also owned 22 per cent. That gave the Sudhir family total 66.3 per cent ownership of the bank. Some of these shares have since been transferred to his children and the majority shareholder, Mr Rasik Kantaria.

47.33 per cent - Mr M/s White Sapphire
M/s White Sapphire is the single largest shareholder in Crane Bank with 47.33 per cent of the shares. In previous documents, these shares were held by a company known as Mr Rasik Kantaria. Documents seen by Daily Monitor do not show when those shares were transferred to M/s Sapphire.

He has also been a long-serving member of the Crane Bank board.
Kantaria is a Kenyan based businessman who is the founder and chairman of Prime Bank in Kenya, a tier three financial institution.
The bank was founded in 1992. Prime Bank also has subsidiaries in Malawi, Botswana, and Mozambique. Just like Sudhir, Kantaria also has investments in real estate, manufacturing and tourism. Through Kenyan based sources, Kantaria was not available to comment on the operations of Crane Bank.

In the documents at the registry, M/s White Sapphire is domiciled in Mauritius. There is no further disclosure on what this company does and who owns it.

Incorporated in November 2011, the Mauritius Central and Business Registration Integrated System, White Sapphire carries out global business. The registered address for White Sapphire, Associated Consultants LTD, is linked to another 253 businesses in Mauritius.
4 per cent – Mr Jitendra Sanghani
He is listed as a London-based businessman. Using the Companies House and Company Check tools for UK registered business did not come up with a Jitendra Sanghani who owns a business at the listed address in the Crane Bank documents.
Tom Mugenga – 0.003 per cent
Mugenga is originally from Kisoro and now runs business both in his home district and Kampala. He has been a board member of Crane Bank since its inception in the 1990’s. He is involved in the clearing and forwarding business, real-estate and agro-processing.
Crane Bank Registration file
On Tuesday, the Daily Monitor, applied to URSB, to have access to the registration file of Crane Bank following reports that the file had gone missing from the Central registry.

Despite not being readily available on Tuesday, Daily Monitor was given some details of the Crane Bank file the next day (Wednesday) indicating that bank was incorporated by the Registrar of Companies on July 23, 1990.
While explaining the delays in the availability of the file, Ms Mercy Kyomugasho Kainobwisho, the director business at URSB, said the file required time to be searched from the registry, currently being upgraded into a digital system.
Once obtained, the Crane Bank documents obtained do not disclose any sort of transfer of shares that happened when the Sudhir Ruparelia family reduced his stake in the bank in 2010, 2011 and 2012.

Dividends to shareholders

Company documents indicate that shareholder dividends started only being paid in 2004. The bank started official operations in 1995 and since 1997 it had been profitable until the troubles of 2015 when it made a loss of Shs3.3b. In total, since 2004, Crane Bank shareholders got a dividend payout totaling Shs119.41b. In 2015, due to the loss the bank incurred, the board did not recommend any dividend payout to shareholders for the first time since 2004.

The payout has been averaging about 50 per cent of total after-tax profit. The balance of this money was placed in the retained earnings pool and used for reinvestment in the business like branch expansion among others.

Since 2004, the company has generated total after tax profit of Shs392b.

How it all went wrong

The decision to take over operations of Crane Bank also resulted in the suspension of the board members of the bank with Bank of Uganda (BoU) taking full operations of the bank. The move by BoU ended speculation about the future of Crane Bank after it posted a loss of Shs3.3b at the end of 2015. The troubled bank had used Shs53b of its income to make provisions for debts that were going bad. Additionally, the level of non-performing had also gone up to Shs142.3b from Shs15b in 2015.

“According to the law, being significantly undercapitalized, you must have less than 50 per cent of the statutory requirements; that is what it means,” said Ms Justin Bagyenda, the director supervision at BoU told reporters at the announcement of the operational takeover.

Impact on Sudhir’s companies

Crane Bank only started disclosing some of the transactions with related companies in 2006. The related companies are those under the Ruparelia Group. The Ruparelia Group is a conglomerate of about 20 companies. Notable of these is lease costs for offices to Meera Investments. Crane Bank leases premises where branches are located. In 2005, Crane Bank was spending Shs2.4b on leasing premises. By 2015, that amount had gone up to Shs11.5b.

Additionally, related company deposits and borrowing from the bank have been growing. In 2005, the companies had borrowed Shs41b from the bank with deposits that same year also totaling Shs302.15b. By 2015, total loans to the related companies had increased to Shs52b and deposits that moved through from the same companies totaled Shs893b. The advances to related companies are short-term and the financial documents of the company indicate that repayment has been prompt with no non-performing asset from a related company.

Another indigenous bank “falls”

Indigenous banks since 1993 have continued to falter. The first ever indigenous bank to be taken over by BoU was Teefe in 1993. In 1995, it was followed by Sembule Investment Bank and Nile Bank. It was only until 1996 and 1997 respectively that BoU moved away from managing them. BoU had managed to secure foreign investors for the two banks. Notably, Greenland and International Credit Bank suffered a different fate as they were seized, closed and assets liquidated giving them no opportunity to survive. The two were closed in 1999 and 1998, respectively. In September 2012, the National Bank of Commerce was also taken over by BoU for carrying out activities that were considered detrimental to depositors. The bank was later closed and assets sold to Crane Bank.

On October 20, 2016, Crane Bank was taken over by BoU. Government is looking for a new investor to inject capital in the bank. For now, two indigenous commercial banks are still standing; Centenary Bank and Orient Bank.