Stanbic Bank
Stanbic Bank
Stanbic Bank
Stanbic Bank
26.7 C
Kampala
Stanbic Bank
Stanbic Bank
Stanbic Bank
Stanbic Bank

CRANE BANK: Supreme Court confirms Auditor General’s report Shs397b was swindled by BoU officials

Must read

Supreme Court ruling on Bank of Uganda versus Sudhir Ruparelia in Shs 397 billion case confirms Auditor General’s report that BoU officials swindled the cash in CBL sale.

The Supreme Court on February 12, 2022 upheld the earlier rulings of the High Court and Court of Appeal that the Bank of Uganda (BoU) must pay the costs of the Shs397b case the central bank and Crane Bank Limited (CBL) in Receivership lodged against Sudhir Ruparelia and Meera Investments, alleging that the respondents had swindled Shs397b from the former CBL.

In his ruling of August 26, 2017, Justice David Wangutusi agreed with Sudhir and Meera Investments that CBL in Receivership had no capacity to sue because it had no locus operandi, awarding costs of the suit to the respondents. BoU rushed to Court of Appeal and the ruling of High Court was upheld to their dismay.

On October 20, 2016, BoU took over the operations of CBL, on allegations of being undercapitalized and that it put depositors’ money under risk.

However in a public notice BoU would shock the nation, saying it had transferred assets of CBL to its rival dfcu in Shs200b deal that has remained controversial to date especially that Shs 478b claimed to    have been used for liquidity support of CBL under statutory management and other services cannot all be accounted for by BoU who were the official receivers of CBL.

In his August 27, 2018, special audit report of BoU on defunct banks, the Auditor General John Muwanga, said that BoU presented Shs466.6b as money injected in CBL as liquidity support but that scrutiny of the related documents established that Shs459.50b was spent for this purpose, leading to a Variance of Shs 7.1b.

Shs12.2b was alleged to have been spent on other service providers such as MMAKS Advocates whose selection was controversial.

Further still, BoU officials who handled the sale of CBL such as former executive director Justine Bagyenda and former deputy governor Dr Louis Kasekende took away about Shs 1 trillion in loan book, it has never been accounted for.

The BoU officials still cannot believe that the Supreme Court has sided with the lower courts that the central bank pays the costs of the suit in which they wanted Sudhir to pay 397 billion allegedly withdrawn from CBL. Sudhir denies he fraudulently accessed that money and therefore he cannot pay.

While quizzing BoU officials, COSASE of the 10th parliament, established that indeed BoU officials ate a huge amount of money they claim to have put in CBL as liquidity support as there was no ledgers and other documents to show the transactions, this notwithstanding the fact that Ben Sekabira, the BoU executive director for banking told the MPs then that CBL needed about Shs150b to remain afloat.

Sudhir, the majority shareholder in CBL, had asked BoU as lender of last resort for that money but he was denied the loan. “The reasons for denial of the loan are questionable given that BoU says it spent much more,” says a Member of Parliament who sat on former COSASE.

Remember that hiding under the Solicit General, Kasekende opposed the audit of the Auditor General and kept some documents away from the auditors. Why would BoU officials hide some of the documents? Their dealings as shown during the parliamentary inquiry were dirty.

After hiding some of the documents related to CBL closure, Kasekende would later want the Auditor General to verify them. Had Kasekende altered some information and figures to make him and other officials clean?

Now that the Supreme Court has told BoU officials that the central bank must pay costs of the suit against Sudhir, we have been told by watchers that they want President Museveni to save them, even though the president advised them not to close CBL but they disregard end his advice. Will Museveni now save them?

In his report, Muwanga indicated that much as BoU has a financial crisis management plan which provides for decision making in the event of systemic shock in the banking sector, the plan does not provide the process of injection of liquidity support to the financial institutions during statutory management like it happened with CBL. According to analysts, only corruption must have forced BoU officials to inject in CBL money so as to steal some of it.

“One wonders, if BoU invested Shs478b in CBL in Receivership, why did the officials sell the bank to dfcu at Shs200b, moreover paid in installments?”

A BoU senior staff when contacts for his views on on the best option his then colleagues should have done, he said, “They should have appointed a neutral receiver of CBL.” “I think that some of my colleagues were interested in getting money out of that process.” He added: ” I am surprised that no report of CBL sale was availed to the Auditor General or Parliament.”

He said that it will be very hard for Sudhir to pay or account for the money he never received. “How can you ask somebody to account for the money he never received?”

Much as BoU has some independence, it did not mean my colleagues had to inject taxpayers’ money into CBL in Receivership. They should have sought parliament’s approval, he said adding, BoU officials who did the transaction for selfish interests must personally be held accountable as recommended by the 10th parliament.

- Advertisement -

More articles

- Advertisement -

Latest article

- Advertisement -