Students of history are well conversant with a French monarchy that crumbled twice due to failure to learn from past mistakes.
The Bourbon dynasty (Monarchy) after taking power (again) following the abdication of Napoleon used the same methods that led to its previous collapse expecting different results.
And thus, a quote up to do is attributed to the Bourbons: “learnt nothing and forgot nothing.”
According to financial analysts, this is what awaits our Central Bank if the top leadership continues to bury its head in the sand allowing the legal department led by Margaret Kasule to mislead a whole chunk of intellectuals at the bank.
On Friday, Bank of Uganda used paid media space (taxpayers money) to issue a statement responding to Supreme Court ruling.
Bank of Uganda lost the appeal, as Supreme Court directed that Crane Bank be returned to Sudhir Ruparelia and also pay costs.
Whereas legal experts contend that the Supreme Court judgment brings to an end the five year commercial litigation about closure of Crane Bank, BoU maintains that case is not over yet citing misleading declarations and applications it filed longtime before it contemplated withdrawing the case which Sudhir Ruparelia, the owner of Crane Bank challenged legally.
The ruling issued on February 11, saw the court also dismiss an appeal by the Bank of Uganda/ Crane Bank (in Receivership) against Sudhir Ruparelia and his company Meera Investments Ltd where the Central Bank had accused Sudhir Ruparelia and Meera Investments Ltd. of causing financial loss amounting to UGX397 billion to Crane Bank in fraudulent transactions and land title transfers.
The justices of the Supreme Court including Rubby Opio Aweri, Percy Tuhaise, Ezekiel Muhanguzi,Prof.Tibatemwa Ekirikubinza and Faith Mwondha, however, dismissed the appeal and also directed that the central Bank pay costs in the terms found by the Court of Appeal.
Legal minds we talked to scoffed at BoU’s statement saying, “there is nothing to review. BoU continues to commit legal blunder after legal blunder. The application for review was arising from a pending appeal which is no longer there. BoU will just incur more costs. They don’t care about taxpayers money.”
“Once an appeal has been withdrawn all pending applications collapsed. An application arising out of an existent appeal can’t stand on its own,” another legal profession added.
Below is BoU Statement on the Supreme Court Ruling
KAMPALA- February 17, 2022 – Bank of Uganda (BoU) has received several inquiries from the public regarding the decision of the Supreme Court in Civil Appeal No. 07 of 2020 Crane Bank Limited (In Receivership) Vs. Sudhir Ruparelia and Meera Investments Ltd which was delivered on February I1, 2022 dismissing the Appeal with costs.
The dismissal by the Supreme Court followed the filing of a Notice of Withdrawal of the Appeal by Crane Bank Limited (In Receivership) on September 15th, 2021 and an objection to the withdrawal filed by Sudhir Ruparelia and Meera Investments Ltd. on September 20th, 2021.
In its ruling of February 11, 2022, the Supreme Court decided as follows: –
(i) That the Judgments of the lower courts, stood. The lower courts found that the receivership of Crane Bank Ltd. ended on January 20, 2018, it was a closed financial institution and was non-existent.
(ii) That upon withdrawal of the appeal by Crane Bank Ltd (In Receivership) and objection by Sudhir
Ruparelia and Meera Investments Ltd on September 20, 2021, the Appeal stood dismissed and the only issue to be determined was on costs and who should pay. However, the dismissal would take effect on the date of endorsement of the ruling (February 11, 2022).
(iii) That Bank of Uganda should pay the costs of the suit because it was aware at the time of taking over that Crane Bank Ltd was financially distressed, incapacitated and could not be expected to pay costs. That it is not logical to expect a shareholder of Crane Bank Ltd. (In Receivership) who is entitled to costs of an action to pay costs to himself.
Further, the Supreme Court noted that the implication of the finding that the receivership of the Appellant had ended was that the management of the Appellant reverted to the shareholders after the 20th of January 2018.
Prior to this recent Supreme Court decision, Crane Bank Ltd (In Receivership) and Bank of Uganda had in October 2021 filed an application before the Supreme Court for review of some of its findings and declarations.
One of the grounds of that application relates to the interpretation and application of a repealed/substituted section of the Financial Institutions Act, 2004 as amended in 2016 when making its ruling of 4th October 2021.
That application is yet to be heard and disposed of by the Supreme Court. The determination of that Application is critical in guiding the Bank of Uganda in implementing the court decisions. We are following up with the Court to have this application fixed for hearing.
Please note that the main suit that related to a claim against the shareholders for wrongful extraction of funds from Crane Bank Ltd by Sudhir Ruparelia and Meera Investments Ltd. has never been heard on its merits.
The Central Bank remains committed to fostering a safe and sound financial sector.
Crane Bank Limited was closed by the Bank of Uganda on October 20, 2016, after it failed to comply with a capital call on July 1, 2016. Governor Emmanuel Tumusiime Mutebile then noted that the Bank of Uganda eventual takeover of Crane Bank was guided by the fact that the bank was under-capitalized and liable to causing financial sector instability.
