Commercial Court will Monday, August 26 make a pronouncement on whether a case brought against property mogul Sudhir Ruparelia and Ruparelia Group founder by the Central Bank will commence or holds no substance.
The ruling will be read by Justice David K. Wangutusi.
The case filed in 2017 by Bank of Uganda claims that Mr. Sudhir caused a financial loss of shs 334b and another Shs8.2 billion to Crane Bank before it was taken over by the Central Bank in 2016.
The court application suggested that Sudhir took out the money which was depositor’s cash for personal gain through various payments to two construction companies and a technology company.
The companies alleged to have been used by Sudhir for these payments have since vehemently rejected the above claims and produced evidence to discredit BoU’s claims.
Bank of Uganda further contends that the land where Crane Bank had branches, was transferred to Meera Investments Limited, another company owned by Sudhir and subsequently leased the land to Crane Bank.
Through his legal officers Kampala Associated Advocates, Sudhir asked court to dismiss the case, arguing that Crane Bank (in receivership) has “no locus standi to bring the suit” against them and that the case is “barred by law.”
In their preliminary objections before Hon Mr. Justice David K. Wangutusi, Kampala Associated Advocates, lawyers argued that a receiver or an entity in receivership- in this case Crane Bank cannot sue or be sued.
“The suit was filed when Crane Bank Limited was in receivership. At issue therefore is; can a suit be filed when a financial institution is in receivership? Our submission is that the receiver has no locus to file the suit,” argued the lawyers.
Bank of Uganda on the 20th October 2016 took over the management of Crane Bank and pursuant to Sections 87 (3) and 88 (1) (a) & (b) of the Financial Institutions Act 2004 and on the 20th of January 2018 BoU placed the bank under receivership pursuant to Section 94 of the FIA.
