Former Crane Bank staff to sue dfcu

KAMPALA- At least 10 former employees of Crane Bank, now under receivership, have run to the High Court in Kampala seeking permission to sue dfcu Bank on behalf of about 400 other sacked colleagues.
The ex-employees want to jointly sue dfcu accusing the bank of breach of their employment contract and breach of their rights when they lost their jobs when dfcu Bank took over Crane Bank in January.

Before the takeover, the central bank had assured the 700 employees that they would not lose their jobs. However, after dfcu took over the bank in January, they sacked some of the employees in a disputed restructuring exercise and closed some of the branches.
According to the court documents, the former employees say their sacking contravened the Employment Act (2006). They are now seeking compensation from the bank.
The lead petitioners are: Therine Kate Achan, Teddy Akullo, Janet Mector Angwena, Mactose Arinaitwe, Edward Bukenya, Dianah Loy Kiwumulo, Abbey Mivule, Benjamin Muchwa, Robert Mwanje and Emmanuel Ngororano.
“The applicants (ex-Crane Bank employees) be given permission of this court to sue the respondent (dfcu Bank) on their respective behalf and on behalf of all former employees of Crane Bank Ltd or their successors/legal representatives,” the court documents read in part.

The court documents further read: “At the date of this court’s permission, commonly interested in an action in tort, an action for breach of contract, and an action for breach of their rights guaranteed by the Employment Act (2006), the [1995] Constitution and International Law against the respondent (hereinafter referred to as the Represented Class).”
In her affidavit in support of this case, Ms Kiwumulo, who was holding the position of banking assistant, compliance officer, at the time when Crane Bank went under receivership, contends that their respective contracts of service with Crane Bank were on or about January 25, transferred to dfcu Bank.

She adds that dfcu Bank was duty-bound to fulfill any and all liabilities and obligations of Crane Bank Ltd vis-à-vis their employment contracts, which was not done.

“The respondent (dfcu Bank) breached constitutional, statutory and common law duties it owed to the applicants (ex-employees of Crane Bank) and all other members of the represented class as the transferee of their respective employment contracts, thereby causing them loss and injury,” Ms Kiwumulo said.
The 10 applicants also promised court that once given the green light to represent the rest of their affected colleagues, they will protect their interests on grounds that they are fully aware of the risks and responsibilities of being representatives of others in a court suit.
“In the circumstances, the representative order hereby sought is not only necessary and efficient, but also fair to all members of the represented class who may not be named as plaintiffs in the intended suit,” Ms Kiwumulo says.
The applicants are being represented by lawyers of Centre for Legal Aid led by Mr Isaac Ssemakadde.
By press time, the court had not convened to hear the application.

Dfcu Bank acquired some of the assets and liabilities of Crane Bank in January 2017.
Crane Bank had been taken-over by BoU after its capital had fallen below the minimum requirement set by the regulator. Dfcu acquired all cash, deposits, loans and advances, furniture and branches.
However, the bank did not acquire insider loans, related company loans, any shareholder liabilities and taxes among others.

BoU took over Crane Bank on October 20, 2016 after its capital was eroded to below the stipulated minimum required, placing depositor’s money at risk. BoU said this was due to the bank’s Non-Performing Loans. At the time, Crane Bank was the third largest bank in Uganda.
Bank of Uganda and Sudhir Ruparelia are embroiled in a new fight over the treatment of the defunct Crane Bank’s non-performing loans worth Shs600b.
Court documents indicate that Mr Ruparelia lawyers want BoU to explain why they wrote off recoverable debts not passed to dfcu Bank when they took over the affairs of Crane Bank in October last year.
The lawyers also seek to know what happened to the securities attached to the loans in question and the former employees of Crane Bank.

The suing of dfcu Bank by the nine ex-employees of Crane Bank, comes barely a month after BoU sued Mr Ruparelia, the former Crane Bank proprietor, and his Meera Investments Company, for allegedly fleecing the bank of about Shs400b in fraudulent transactions and transfers.
BoU wants Mr Ruparelia to pay back the money. Mr Sudhir has since denied any wrongdoing and instead blamed the bad economy and non-performing loans.
Mr Ruparelia has also sued BoU for alleged breach of the confidential settlement and release agreement in which both parties had agreed not to sue each other.
He is seeking to recover $8m (about Shs28b) from BoU for the alleged breach of the mutual agreement, and wants his land tiles returned and another $8m (about Shs28b) in damages.
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