KAMPALA, Uganda: Just-off-the-grill info hitting our investigative desk paints a gloomy picture for moneybags Sudhir Ruparelia.
Our impeccable sources are intimating to us how top-notch lawyers in town are busy compiling evidence that is likely to culminate into several serious charges being brought up against Sudhir for allegedly diverting Crane Bank customers’ deposits.
We understand that the president has since cleared the lawyers to commence a private prosecution against Sudhir who is touted as the richest man in East Africa. The private lawyers have asked to withhold their particulars and their business names for the time being.
“This is a very, very sensitive matter. It involves big people some in government… revealing us at this point in time would jeopardise our investigations and put our lives at risk at worst,” the lawyers pleaded.
Sudhir has, as a matter of principal, not been commenting on issues to do with Crane bank since Bank of Uganda took it over. He has always referred journalists seeking information regarding the bank to Bank of Uganda.
But why private prosecution? Sources acquainted with the issue at hand have told us that the president does not want to be seen as the one behind the prosecution of his friend let alone big investor. “Sudhir has invested a lot of money into the economy. He is employing many Ugandans. The president would not want to get directly involved in prosecuting such a man,” the sources opine.
Independently, we know that Museveni is steering clear of getting involved directly in Sudhir’s prosecution because the tycoon has on several occasions helped to bankroll his political campaigns as well as those of the NRM candidates.
When Museveni asked for help towards building the Movement House, Sudhir is the one who came along with the biggest kitty. He contributed a whopping Ushs3Bn to the cause, exceeding the alms contributed by other wealthy Ugandans combined.
Seeing from the above, it would be imprudent of the president to get directly involved in prosecuting Sudhir through the DPP and other police agencies.
It is these fears and others volunteered by our sources which is prompted the president to look at private prosecution as the convenient means available to bring Sudhir to book in regard to the financial distresses dogging Crane Bank.
We know that the private prosecution team have been liaising with the team set up by Bank of Uganda to carry out a forensic audit into Crane bank with the view to establish the exact damage it was subjected to by its former managers and owners.
This website understands that Bank of Uganda is not opposed to the private team using its resultant audit in court to pursue a conviction against Sudhir and other potential culprits.
“Bank of Uganda has devoted huge sums of money to keep Crane Bank afloat as it waits for buyers to take it over. Those public funds must be realised from those who dug a hole into Crane Bank’s coffers at the end of the day,” one of the lawyers said in a stern tone
Lawyers on the private prosecution team have told us that the evidence they have collected so far reveal how Sudhir was using his lofty position as the majority shareholder of Crane Bank to engage in inside lending as well as order the dishing out of huge loans without recourse to the professional staff of the bank.
By the time Bank of Uganda came in, Crane bank had failed to collect hundreds of billions in loans that had been dished out to several individuals and companies. The loans had been declared non-performing.
Inside lending simply means a bank lending out to its sister companies without due regard to known financial procedures. It is among other major factors which saw the Greenland bank going under after the financial institution lent out huge sums of money to its sister companies at the whim of its former managing director Dr Suleiman Kiggundu (RIP).
The same had proved true in the case of International Credit Bank which had collapsed owing to massive inside lending that was carried out at the prompting of its owners led by Mzee Thomas Katto (RIP).
It should be remembered that Dr Kiggundu was arraigned in court of law on various charges related to inside lending and abusing depositors’ funds which vices ended up sinking Greenland bank never to swim the tide again.
Aside from facing prosecution, Kiggundu had his empire sold off to zero. The proceeds of the sale were put to paying off public funds Bank of Uganda had used to sort out depositors of Greenland bank.
The private prosecution team is backing on the antecedence above created by the trial of Dr Kiggundu to justify visiting similar charges against Sudhir.
After bank of Uganda had taken over Crane Bank, President Yoweri Museveni ploughed a total of Ushs200Bn into the financial institution to try to salvage it. But we understand that the amount has since proved to have been a drop in the sea.
‘Crane Bank had been damaged beyond repair,’ is how a source familiar with the bank’s financial situation puts it.
As if to prove the above source right, many potential buyers have come up only to back off after looking at Crane bank’s balance sheet.
DFCU to the rescue
That notwithstanding, this website can now reveal that one local bank is willing to ‘marry off’ Crane Bank. The bank is DFCU. But the new suitor is not willing to take over baggages of Crane Bank
DFCU insists that the ‘marriage’ can only take place if Bank of Uganda is willing to keep the liabilities. Put the other way, DFCU is not ready to inherit Crane bank’s non-performing loans.
The big question: Who is going to pay the ultimate cost as far as the billions in non-performing loans on Crane Bank’s balance sheet is concerned? The majority shareholder, Sudhir, of course! And the process of ensuring this has ensued already with the president backing it. Will Sudhir survive the looming legal tide? Just keep watching this space.