TRIPARTITE SAGA? Governor Tumusiime Mutebile, Deputy Governor Loius Kasekende and former Bank Supervision Executive Director Justine Bagyenda.

The Bank of Uganda (BoU) never carried out a valuation of the assets of the Crane Bank Limited (CBL) after the central bank took over management and subsequently sold it off to the dfcu Bank at Shs200 billion, shareholders have said.

According to the CBL shareholders, the non-valuation of the CBL assets was contrary to the regulations of the Financial Institutions Act (FIA), and that those responsible for the sale of CBL were wheeler-dealing for personal gain.

The shareholders, who are reacting to a sale agreement dubbed: ‘The major contentious issues with the Purchase of Assets and Assumption of Liabilities Agreement entered into between Bank of Uganda and DFCU Bank Limited dated 25th of January 2027’, say at the time of the CBL take over it was worth about Shs1.3 trillion.

The document was reportedly signed by among others the central bank Governor Professor Emmanuel Tumusiime Mutebile, on behalf of BoU and Juma Kisaame and William Sekabembe, Managing Director and Executive Director respectively, on behalf of DFCU Bank.

‘There was no market valuation of the assets of CBL prior to their transfer to DFCU as required by law under the FIA. This gives DFCU a bonanza at tax payer and shareholder expense. BoU officials deliberately undervalued assets so as to give DFCU a sweetheart deal. That is the reason that this agreement is deliberately vague on the value of assets taken over y the DFCU (yet this should be a material point to include in an agreement of the kind),’ the shareholders, among them tycoon Sudhir Ruparelia, state in their 4-page unsigned document.

The shareholders also take exception to the dramatic rise in the declared value of the branch networks from Shs10 billion to Shs47 billion, just days after the sale.

‘’…when one looks at the CBL balance sheet at the time of takeover by DFCU, the branch network was valued at UGX10 billion only. Within just days of taking over the assets, DFCU revalued the same at 47 billion!!! Showing a discrepancy of 37 billion shillings given to DFCU for nothing,’ the shareholders further say.

The shareholders add: ‘This undervaluation benefitted DFCU and Bank of Uganda officials (as well as their legal advisors) on this transaction.’

The law firms cited by the shareholders in the sale of CBL are MMAKS Advocates and AF Mpanga, who were representing the BoU. The shareholders also charge that in furtherance of their interests, the two law firms were also retained by DFCU after the sale of CBL.

‘Immediately after concluding this sale, both MMAKS Advocates and AF Mpanga (Bowmans) went to work for DFCU to collect loans and earn fees from the CBL loan portfolio and they continue to work for DFCU up to this day on this very portfolio they sold’, the shareholders add.

Last year commercial court judge David Wangututsi, in a judgment read by Commercial Court Registrar Lillian Bucyana, told lawyers Timothy Masembe Kanyerezi of MMAKS and David Mpanga of AF Mpanga that they erred at law, and in conflict of interest, to represent BoU in a Shs400 billion case against billionaire businessman Sudhir Ruparelia, their former client.

Justice Wangututsi further ruled that the two lawyers were acting to jeopardise the city tycoon’s business interests in respect to the now-defunct Crane Bank that is under receivership.

At the time Mr. Ruparelia, who was represented in the landmark case by Messrs. Kampala Associated (KAA) Advocates, sought court’s intervention against the two lawyers, arguing that they had previously represented him and a host of his companies for 12 years, and that they should instead have acted as his witnesses in Uganda’s biggest commercial case that pitted the BoU against the tycoon.