In a startling turn of events, legal experts have launched scathing criticism against the Bank of Uganda (BoU) for its recent directive aimed at erasing Crane Bank Limited (CBL) from official records.
The move, described as misleading and potentially illegal, has reignited concerns over BoU’s handling of the long-standing legal saga surrounding Crane Bank’s de-registration.
The controversy stems from a notice issued by BoU on April 3, 2024, citing Section 7(1)(a) of the Financial Institutions Act, 2004, and advising the Uganda Registration Services Bureau (URSB) to remove the word ‘Bank’ from Crane Bank Limited’s company name. This directive, however, has been met with vehement opposition from legal circles, with experts asserting that BoU has overstepped its authority and is treading on dangerous legal ground.
According to official records at URSB, Crane Bank Limited, a prominent member of the Ruparelia Group of Companies, has been registered since July 23, 1990, with a specific mandate to conduct banking business. Despite being closed by BoU in October 2016 and subsequently sold in January 2017, Crane Bank’s legal status remains a contentious issue, fuelling public outcry and legal battles.
Prominent legal figures have raised serious doubts about the legality of BoU’s directive, highlighting the absence of legal basis for the central bank to unilaterally instruct URSB to deregister Crane Bank. One top lawyer, speaking on condition of anonymity, asserted that BoU’s actions smack of desperation following legal setbacks in cases involving Sudhir Ruparelia, a major shareholder in Crane Bank.
“BoU has no authority to deregister Crane Bank Limited. Their attempt to do so is not only illegal but also reflects a desperate manoeuvre to regain control after losing legal battles against Sudhir,” the lawyer stated. He further suggested that BoU’s legal department should seek guidance from the Attorney General/Solicitor General to avoid further legal complications.
Another legal expert warned of potential lawsuits against URSB should it heed BoU’s advice and proceed with the deregistration of Crane Bank. “URSB cannot rely on BoU’s directive alone. They must consider the legal ramifications and respect the rights of Crane Bank’s shareholders,” the expert cautioned.
The unfolding controversy sheds light on the complex legal entanglements surrounding Crane Bank’s de-registration and BoU’s contentious role in the matter. Despite attempts by BoU to obscure the truth, recent developments underscore the deep-seated legal challenges and contradictions plaguing the central bank’s actions.
In the wake of mounting criticism and skepticism from legal quarters, BoU faces renewed scrutiny over its handling of Crane Bank’s de-registration and its broader implications for Uganda’s financial landscape. As the legal battle intensifies, stakeholders await clarity and accountability from BoU, whose actions have once again stirred controversy and eroded public trust.
