BoU officials implicated in the report on closure of commercial banks.

 

Bank of Uganda this week suffered another crushing legal defeat after five Supreme Court judges dismissed it’s application challenging a High Court ruling in favour of Sudhir Ruparelia.

The defeat at the Supreme Court comes as the latest blow in a myriad of cases that the central bank has lost in court to Dr Sudhir.

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With every defeat in court,the Central Bank continues to lose trust and credibility,two virtues that are very critical in the capital markets.

The many losses have led to questions over why BoU continues to pour taxpayers money in pursuit of cases that it is always sure to lose to Dr Sudhir.

” It is now an issue of ego. There are some people here(at BoU) who feel humiliated by the many losses but they still keep on suing Dr Sudhir,”an official in BoU’s Legal Department,told us in confidence.

The Legal Department at BoU is split between a majority that argues that the central bank should eat humble pie bad accept that there are no winnable cases against Dr Sudhir,and a minority that believes in fighting a lost war.

In it’s report,Parliament’s Committee on Commissions,Statutory Authorities and State Enterprises(Cosase) warned that BoU’s relationship with lawyers from MMAKS Advocates be questioned.

Documentation in Parliament points to possible collision between lawyers and BoU’s Legal Department,leading to many cases where billions of shillings are exchanged.

MPs have continuously argued that BoU has no sound case against Dr Sudhir and that instead of wasting taxpayers’ money on bogus cases,BoU should concentrate on fiscal and monetary issues.

Financial experts have also warned that the continuous legal defeats of BoU at the hands of Dr Sudhir will further undermine the already-eroded credibility of the central bank,thus escalating it’s inabilities to controlling fiscal policy.

With all these crushing defeats,experts have also warned that the trust of the Bank in auctioning Treasury Bonds and Bills could be affected by loss of trust,further crippling Government efforts in mobilising revenue.

In a very unscrupulous move,the Central Bank had run to the Supreme Court in a bid to substitute Crane Bank in Receivership with Crane Bank in liquidation.

However,the petition was unanimously dismissed by the five Supreme Court judges who ruled that the change would fundamentally alter the facts if the case and deny both Dr Sudhir and Meera Investments a fair hearing.

The attempt by BoU to switch parties in the case dates back to October 2016 when the Central Bank took over the assets and liabilities of Crane Bank Limited before selling them to Dfcu.

Subsequently,BoU-through Crane Bank in Receivership sued Dr Sudhir and Meera Investments.

However,the case was dealt a bruising blow after Dr Sudhir successfully argued that Crane Bank in receivership had no basis of suing.