After losing interest in the Meera Investment Limited properties it paid at Shs10 billion, Dfcu bank is demanding for Shs47 billion compensation from the Bank of Uganda (BoU).
However, it has emerged that Dfcu bank has failed to justify the Shs47 billion after being asked by BoU to do so. For starters, BoU never valued any properties which they had gotten from Meera Investment during the closure of Crane Bank Limited.
Dfcu having been lured into the Crane bank deal by conflicted city law firms of MMAKS and Bowmans and Mpanga Advocates on one side and on other side having BoU Deputy Governor Dr. Louis Kasekende and Justine Bagyenda misled them into buying Meera Investments only at Shs10 billion without any property valuation.
However, it has now emerged that Dfcu Bank wants BoU to pay them Shs47 billion as a result of the decision to exit properties and they are basing that claim on the Purchase of Assets and Assumption of Liabilities Agreement signed between the bank and BoU on January 25, 2017.
The valuation of Meera investment properties was Shs47 billion as Dfcu bank took over CBL. Yet Dfcu bank paid BoU only Shs10 billion for the properties and has used them for almost now three years without paying rent, leading Meera Investments Limited to sue them.
The latest scenario now shows Dfcu Bank underdeclared the value of the properties as they did the valuing which BoU based on to accept Shs10 billion. Dfcu Bank should have paid more in stamp duty based on the value of the properties, which amounts to tax evasion and criminality.
Dfcu bank is demanding for the money after realising BoU is unlikely to recover the money as sighted in the agreement.
Sources say BoU Governor Emmanuel Mutebile is not willing to meet Dfcu Bank officials to resolve the matter after it transferred 48 lease titles of former Crane Bank Limited back to BoU
In August this year it emerged that the bank was misled by city Law firm Sebalu & Lule Advocates to illegally transfer title properties into its name yet the properties belong to Meera Investments Ltd even though it had leased them to Crane Bank Limited.
Sebalu & Lule Advocates who have been barred by court from representing the same bank against city tycoon Sudhir Ruparelia for being conflicted. The law firm misled Dfcu Bank to transfer freehold titles from Crane Bank Ltd during the controversial takeover in January 2017.
Also following court ruling in late August 2019 that Crane Bank (In Receivership) has no right to sue Meera Investments and Sudhir Ruparelia for Shs379 billion allegedly swindled, Dfcu bank Limited in a letter dated September 12, 2019 informed BoU of its decision to exercise its option to rescind its interest in purchasing the 48 properties pursuant to clause 8.7 of the Agreement.
As part of the rescinding of the purchase, Dfcu will return to Bank of Uganda certificates of title for Meera Investments Limited ‘and requires Bank of Uganda to pay dfcu the new book value of properties or Shs47 billion recorded in the assets and inventory compilation as October 20, 2016. But the bank interestingly had valued the properties at Shs10 billion.
Dfcu bank acquired some assets of CBL at Shs200 billion, paid in installments, without any interest on top.
Some analysts have urged that BoU gave Dfcu bank CBL assets for free even as the bank now wants to be paid Shs47 billion by BoU which depends on the taxpayer.
Dfcu’s Crane Bank take-over made it to become the second largest commercial bank in the country, with an asset base of Shs3.37 trillion, just behind the market leader Stanbic Bank that boasted of Shs3.73 trillion in assets then. It also at the same time saw an increase in the branch network from 45 to 66 branches countrywide.
“We believe that the acquisition which placed Dfcu bank amongst the top three banks in the market in terms of total assets puts the group firmly on the path to transforming from a niche bank to a universal bank,” the notice reads in part, “Overall we expect the transaction to result in enhanced value to our shareholders through superior financial performance,” Dfcu bank said in a financial statement released on August 15, 2017.
However, the latest development means Dfcu bank’s asset value has gone down given that they have given up on those wrongly acquired from CBL /Meera Investments Limited.
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