Mbabazi partners to join Crane Bank case

KAMPALA. Two shareholders of the defunct National Bank of Commerce, which was co-owned by former prime minister Amama Mbabazi, have indicated their intention to join in the legal battle involving businessman Sudhir Ruparelia and Bank of Uganda (BoU).
BoU two weeks ago sued Mr Ruparelia and his Meera Investments Ltd on behalf of Crane Bank, seeking to recover at least Shs397b, accusing the two defendants of fraud.

Mr Amos Nzei and retired Bishop William Ruchirande, the two former shareholders of the defunct NBC, yesterday wrote to the deputy registrar of the Commercial Division of the High Court through their lawyers Fred Muwema, Severino Twinobusingye and John Mary Mugisha.

“Our clients have learnt that BoU, which revoked the NBC banking licence and sold its assets to Crane Bank on September 27, 2012, is now accusing its proprietors of engaging in serious bank fraud committed before and after the sale of NBC. Our clients believe that 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, which is the subject of the suit.”
The defunct NBC was owned by individuals from Kigezi sub-region, who at different times included former Finance minister Ezra Suruma, Prime Minister Ruhakana Rugunda and retired Supreme Court Justice George Kanyeihamba.

In November 2016, after Crane Bank had been taken over by BoU, NBC shareholders protested against it being sold to dfcu, pointing to a petition they had filed in the Constitutional Court challenging the takeover of their bank and handing it over to Crane Bank. BoU ignored their protests and proceeded to hand over Crane Bank to dfcu.

The two NBC shareholders contend that the alleged fraud could not have been committed without collusion from BoU, or some elements at the central bank, and say they want to study case file (HCCS No. 493 of 2017 Crane Bank Limited (In Receivership) vs Sudhir Ruparelia and another) to determine their next course of action and investigate the extent to which Crane Bank, Mr Ruparelia and BoU are culpable for what they call the loss and damage caused to NBC. Attempts by the NBC shareholders, they claim in the letter to obtain the case file have been fruitless, hence the petition to the registrar.

Mr Solomon Muyita, the senior communications officer of the Judiciary, told Daily Monitor yesterday: “The judge asked to peruse the file so I want to think he hasn’t returned it, and that is why NBC shareholders couldn’t access it. But when he returns it they will gain access.”

“Once we have obtained the case file we shall either apply to join the above suit to avoid multiplicity of suits or maintain a separate suit,” the shareholders’ letter says.
They say the action they intend to bring raises critical questions of law and fact, including whether Crane Bank had capacity to contract and purchase NBC shares when it was owned by one shareholder; whether the shareholders should be compensated in reputational damage and business loss; restoration of NBC’s banking licence; explanation on the assets seized by BoU; and to what extent they are affected by the fraud.

They say they would also like to explore “how much of the money said to be stolen by Ruparelia from the bank belonged to NBC and to what extent his fraud motivated the sale and closure of NBC.”
The duo also want court to determine if BoU and its officers are liable for breach of non-delegable duty, statutory negligence and misfeasance in public office.

ISSUE
The two NBC shareholders contend that the alleged fraud couldn’t have been committed without collusion from BoU, or some elements at the central bank, and say they want to study case file (HCCS No. 493 of 2017 Crane Bank Limited (In Receivership) vs Sudhir Ruparelia and another) to determine their next course of action and investigate the extent to which Crane Bank, Mr Ruparelia and BoU are culpable for what they call the loss and damage caused to NBC.

Statement

“Our clients have learnt that BoU, which revoked the NBC banking licence and sold its assets to Crane Bank on September 27, 2012, is now accusing its proprietors of engaging in serious bank fraud committed before and after the sale of NBC. Our clients believe that 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, which is the subject of the suit,”
Statement of lawyers of former nbc partners.

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