Defunct National Bank of Commerce (NBC) and one of the shareholders Amos Nzeyi in unprecedented turn of events have dragged Bank of Uganda (BoU) and businessman Sudhir Ruparelia to Court.
Nzeyi contests the manner in which Crane Bank acquired NBC on directives of the Central Bank way back in 2012.
This fresh lawsuit premises on BoU’s decision to sue Sudhir claiming that he fraudulently caused a financial loss of shs 300b to Crane Bank.
Yesterday- Tuesday Nzeyi and NBC state BoU decision to take over their institution in 6 hours on 27 September 2012 was in “bad faith” and in “breach of its non-delegable statutory duties simpliciter under the Financial Institutions Act 2004 (as amended) and is therefore null and void.”
Represented by lawyer Fred Muwema, the petitioners argue that by the time of “takeover, winding up, liquidation, closure and sale” of NBC by the Central Bank, it was not an “insolvent financial institution.”
The plaintiffs have since tendered in court the monitoring report for September 2012 issued by BoU as evidence that NBC was not insolvent.
They further submitted NBC had just undertaken an expansion programme approved by BoU where it had acquired and refurbished new Headquarters at Yusuf Lule Road in Kampala for about US$ 1.8 million.
NBC said it had also just re-capitalized to the tune of Shs. 7 billion as directed by BoU to meet “minimum capital requirements” but it was “suffering arbitrary civil penalties and a ban on borrowing and lending” imposed by the Central Bank.
Nzeys’s new application further exposes the Central Bank’s negligence to supervise commercial banks yet it is one of its core roles.
Last week a concerned citizen Derrick Nsereko sued BoU asserting it neglected Crane Bank before selling it off to DFCU Bank.