Tycoon Sudhir Ruparelia

Billionaire businessman Sudhir Ruparelia has filed his defence against charges of ‘extracting US$80 million (about Shs400 billion) from Crane Bank, brought against him by the Bank of Uganda and the latter, now in receivership, about two months ago.

Mr Ruparelia, who is the 1st defendant in Civil Case 493 of 2016, was one of the Non-Executive Directors and shareholders of the defunct Crane Bank, and through his lawyers Ms. Kampala Associated Advocates (KAA), contends that at no time did he breach his obligations while serving the Crane Bank in both capacities. The second respondent in the case, Meera Investments, is another company where Mr. Ruparelia is a shareholder.

In a 62-page defence filed in the High Court Commercial Division on August 3, Ms. KAA also indicate that by representing Crane Bank, opposite counsel, Ms. MMAKS Advocates, acted in ‘conflict’ of their client, Mr. Ruparelia’s interests, since the law firm was previously retained by Crane Bank, where he was one of the Non-Executive Directors.

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In Section 90 of the defence, KAA aver their client Mr. Ruparelia, while non-executive director, participated in overseeing a buoyant Crane Bank which grew from one branch in 1995 to 46 branches at the BoU took over Crane Bank in 2016. At the time, the lawyers further aver, the Crane Bank had a customer base of over 600.000 customers, with the bank acquiring assets worth over Shs1.8 trillion, a development confirmed through an annual audit report carried out by international audit firm Klynveld Peat Marwick Goerdeler (KPMG).

Further, in Section 92 KAA avers that since the takeover of Crane Bank by the Receiver, in this case the BoU, their client Mr. Ruparelia and his other shareholders have not been given any accountability by the Receiver, ‘in total violation of the Receiver’s fiduciary obligations’. The KAA lawyers also contend Mr. Ruparelia will ‘at the earliest opportunity seek disclosure of all documents relating to the Agreement between the Receiver and DFCU bank and in particular the purchase price of the Plaintiff’s (Crane Bank) assets’.

Further, in the filed defence KAA lawyers contend that in January this year Mr. Ruparelia’s representatives, Mr. Kakembo Katende and Azam Tharani attended a meeting with lawyers Masembe Kanyerezi and David Mpanga at the chambers of MMAKS, ostensibly to share the contents of ‘an alleged PWC forensic report indicating the alleged extraction of US$80 million’.

‘The Plaint contains excerpts of the report and from those excerpts the 1st Defendant (Mr. Ruparelia) has been able to establish that the alleged report is actually a draft document created by PWC on 13th November 2014

KAA also says it will line up over 20 witnesses to testify in favour of their client Mr. Sudhir Ruparelia, among them Mr. Ruparelia himself and his wife Jyostna Ruparelia; the Bank of Uganda Governor Prof. Emmanuel Tumusiime Mutebile and his deputy Louis Kasekende; the BOU Director of Bank Supervision Ms. Justine Bagyenda. Other witnesses include officials the BoU, former Crane Bank Directors and shareholders, lawyers Timothy Masembe Kanyerezi from MMAKS and David Mpanga from AF Mpanga Advocates; and officials from the audit firms of PriceWaterhouseCoopers (PwC); Deliotte and Touche and KPMG.

Other witnesses include Godfrey Yiga Masajja and Susan Wasagali Kanyemibwa from BoU; Francis Kamulegeya and Uthman Mayanja from PwC; George Opio from Deliotte and Touche and, Benson Ndungu of KPMG.

The BoU-Crane Bank- Sudhir Ruparelia standoff comes in the wake of reports indicating that top officials at the Central Bank are divided over the procedures undertaken by the BoU that led to the filing of the court case.

According to sources, some top managers argue that the BoU, through its Bank Supervision Directorate headed by Ms. Justine Bagyenda, failed to execute its mandate. The protagonists further argue that before filing the case the BoU did not exhaust all avenues that could lead to a negotiated settlement of the stand-off.

Meanwhile, other reports indicate that the BoU/Crane Bank lawyers, Ms MMAKS Advocates and AF Mpanga Advocates, have allegedly refused to share information from a PwC forensic audit that had been requested for by Mr. Ruparelia’s lawyers, Ms. KAA law firm.

By press time efforts to contact opposite counsel were futile.

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