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    Fake Blackmail: Let Ham Deliver Nakivubo Stadia instead of Labeling Bond Okello, Audrine Nsubuga Unpatriotic

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    Fake Blackmail: Let Ham Deliver Nakivubo Stadia instead of Labeling Bond Okello, Audrine Nsubuga Unpatriotic

    Fake Blackmail: Let Ham Deliver Nakivubo Stadia instead of Labeling Bond Okello, Audrine Nsubuga Unpatriotic

    Heroine! Presidency Minister Milly Babalanda Saves Kyabazinga from Physical Assault at the Canada Busoga Symposium

    Heroine! Presidency Minister Milly Babalanda Saves Kyabazinga from Physical Assault at the Canada Busoga Symposium

    All Royal: HRH Kamuswaga Concludes His Official Trip to California with Lots of Investors` Attraction to Kooki Kingdom

    All Royal: HRH Kamuswaga Concludes His Official Trip to California with Lots of Investors` Attraction to Kooki Kingdom

    Of Daily Monitor’s 30th Well-Earned Birth Bazaar And the Tough Scribes That Have kept M7`s Sleep in Constant Check

    Of Daily Monitor’s 30th Well-Earned Birth Bazaar And the Tough Scribes That Have kept M7`s Sleep in Constant Check

    Stephen Kissa the Pace-setter

    Stephen Kissa: Unveiling the Country’s Pace-maker who set Ace Cheptegei`s World Athletics` Gold and Bronze Medals

    NRMO Canada Symposium: Minister Ruth Nankabirwa to Represent President Museveni at the 1st Ever Do

    NRMO Canada Symposium: Minister Ruth Nankabirwa to Represent President Museveni at the 1st Ever Do

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    • All
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    • Gadget
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    Digital Technologies Could Help Uganda’s Economy Recover Faster

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    Liquid Telecom to host first cloud event of its kind in Uganda

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    Hon. Frank Tumwebaze graces PRAU Governing Council Handover Ceremony

    UG Pineapple at B&W

    It was Blankets and Pineapple Waragi as SA’s Distruction Boys entertain Kampala

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
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    • All
    • Gaming
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    Rev and Groove: Mbarara City Festival Rally Set to Fire Up the Community at Booma Golf Course Grounds this February

    Rev and Groove: Mbarara City Festival Rally Set to Fire Up the Community at Booma Golf Course Grounds this February

    Alone and Frustrated: Irate MC Kats Tag Anti HIV NGOs as Bogus and Useless with Empty Promises Towards His Cause

    Alone and Frustrated: Irate MC Kats Tag Anti HIV NGOs as Bogus and Useless with Empty Promises Towards His Cause

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    Cut The Slack: Naysayers Can go Hang but Spice Diana Deserves her Success Moment of Glory for a Crooner her Age

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    Alone and Frustrated: Irate MC Kats Tag Anti HIV NGOs as Bogus and Useless with Empty Promises Towards His Cause

    Alone and Frustrated: Irate MC Kats Tag Anti HIV NGOs as Bogus and Useless with Empty Promises Towards His Cause

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Governor Emmanuel Mutebile: Unless we swiftly acted, Crane Bank was going to crush the entire Nation’s Banking System

An inventory by external auditors found that the assets of Crane Bank were significantly less than its liabilities.

September 3, 2021
inCrime, crime New, Crime news, Featured
Governor Emmanuel Mutebile: Unless we swiftly acted, Crane Bank was going to crush the entire Nation’s Banking System

Momentary Jubilations: Dr. Sudhir and friends have a drink up after 'winning' the case

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KAMPALA, Uganda: Bank of Uganda Governor Emmanuel Mutebile made the statement on 30th June 2020, shortly after city tycoon Sudhir Ruparelia reportedly floored Bank of Uganda over the latter’s takeover of Crane Bank Limited (CBL), saying the embattled financial institution was going to crush Uganda’s banking sector.

This explanation is what Mutebile gave to the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) when he appeared with his team before Parliament. And this same narrative by the regulator is what was denied public knowledge, as many media houses reportedly pocketed dimes to shelve it. Below, we reproduce the same statement:

“KAMPALA – 30 June 2020 – Bank of Uganda (BoU) wishes to inform the public of its decision to appeal the Court of Appeal’s dismissal of the case filed by Crane Bank Limited (in Receivership) vs. Sudhir Ruparelia and Meera Investments Limited to the Supreme Court.

In exercise of its powers under sections 87(3), 88(1)(a)&(b) of the Financial Institutions Act, 2004, BoU placed Crane Bank Ltd (In Receivership) under Statutory Management on 20th October 2016. This decision was necessary upon discovering that Crane Bank had significant and increasing liquidity problems that could not be resolved without the Central Bank’s intervention given that Crane Bank had failed to obtain credit from anywhere else.

An inventory by external auditors found that the assets of Crane Bank were significantly less than its liabilities. In order to protect the financial system and prevent loss to the depositors of Crane Bank, Bank of Uganda had to spend public funds to pay Crane Bank’s depositors. A subsequent forensic investigation as to why Crane Bank became insolvent found a number of wrongful and irregular activities linked to Sudhir Ruparelia and Meera Investments Ltd.

These findings form the basis of the claims in the lawsuit by Crane Bank. The suit was necessary for recovery of the taxpayers’ money used to pay depositors’ funds as well as the other liabilities of Crane Bank. BoU set about resolving the affairs of Crane Bank in a manner that would safeguard depositors, preserve the safety of the financial system, and restore the taxpayers’ money that had been deployed to prevent loss to depositors and a potential financial crisis.

In this effort, Sudhir Ruparelia signed a Settlement and Release Agreement with BoU on 20th March 2017 in which he undertook to pay a sum of USD 60 million and to return land titles that had been irregularly taken from Crane Bank, which is the actual owner of the branches on which its branch network sat across the country.

CRANE BANK TO APPEAL TO SUPREME COURT Under this agreement, Sudhir Ruparelia only paid USD 8,000,000 and regrettably later refused to comply with his undertakings. It was at this point that BoU as receiver of Crane Bank instituted a High Court case H.C.C.S 493 of 2017 against Sudhir Ruparelia and Meera Investments Ltd.

The main claims in this suit based on the findings of the forensic investigation are that; one, Sudhir Ruparelia illegally and secretly owned 100{0945c2a372ac1e8bbfe7cc3e10f9b82eb0b8ae872b07368d754f0396b6ef2afe} shareholding in Crane Bank in breach of the Financial Institutions Act, 2004, two, Using that position of control, Sudhir Ruparelia wrongfully and illegally extracted from Crane Bank amounts totaling to USD 92,830,172 and UGX 8,277,000,000.

Three, Sudhir Ruparelia transferred freehold property beneficially owned by Crane Bank into the names of Meera Investments Ltd in which he and his family are the majority shareholders, without giving value to Crane Bank and rendering the Bank a tenant on its own property with a liability to pay rent to Meera Investments Ltd.

In response, Sudhir Ruparelia and Meera Investments Ltd filed a defense and later an application arguing that Crane Bank had no capacity to sue them while in receivership and that upon transfer of some of its assets to DFCU Bank, Crane Bank ceased to exist. Both the Justice at the High Court and those at the Court of Appeal upheld these arguments.

Bank of Uganda maintains that receivership does not take away the corporate personality of a company which includes the right to trace and recover assets and the right to sue for those assets. The public is also invited to note that neither the High Court nor the Court of Appeal has yet considered or taken a decision on the claims for wrongful and illegal extraction of funds from Crane Bank as claimed in the main suit.

The implications of these judgments are that a Receiver of a financial institution/bank cannot pursue or seek recovery of assets of a bank in receivership by way of legal proceedings. This renders the principle of tracing and preserving assets of an insolvent bank during statutory management and receivership futile.

The judgments also set a precedent that limits the Central Bank’s capacity to resolve banks in a manner that ensures accountability for mismanagement of depositor funds and promotes good corporate governance in the banking industry. For these reasons, BoU as receiver of Crane Bank is dissatisfied with the rulings of both the High Court and the Court of Appeal and has taken a decision to appeal to the Supreme Court in addition to pursuit of other legal recovery options.

BoU wishes to reassure the public that it is committed to pursuing this matter to its logical conclusion. BoU will update the public on any further developments through its formal communications channels including the website… Prof. Emmanuel Tumusiime–Mutebile GOVERNOR”

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