Ugandan tycoon Sudhir Ruparelia has opened a potentially explosive legal battle in the United Kingdom, seeking at least €200 million (about Shs 889 billion) in damages from Dutch banking giant Rabobank and two of its former senior executives over the controversial takeover and sale of Crane Bank.
The case, being heard in a London court, brings back into the spotlight the bitter 2016 collapse of Crane Bank and the circumstances under which its assets and liabilities were subsequently transferred to DFCU Bank.
Ruparelia, who founded Crane Bank in the 1990s, claims that the bank was taken from its owners through an unlawful and allegedly corrupt process before being sold below its market value.
Rabobank is headquartered in the Netherlands, with its administrative centre in Utrecht and its registered office in Amsterdam. Rabobank
Ruparelia and other former Crane Bank owners allege that Rabobank and the Dutch development bank FMO were among the parties that benefited from the transaction.
The claim is one of the most significant legal challenges yet linked to the controversial demise of one of Uganda’s largest indigenous banks.
Crane Bank was placed under Bank of Uganda administration in 2016 after the central bank declared that the institution was in serious financial difficulty.
Three months later, its assets and liabilities were transferred to DFCU Bank.
Ruparelia now argues that the process leading to the transfer was fundamentally flawed and that the bank was ultimately taken away from its owners through a scheme in which other financial interests benefited.
At the heart of the London case are allegations concerning the valuation of Crane Bank and the circumstances surrounding its eventual sale.
Ruparelia alleges that DFCU acquired the bank without an independent valuation and that the central bank had been approached before the administration with proposals to acquire Crane Bank at a price substantially below its alleged market value.
He also accuses former Rabobank executives Albert Jonkergouw and Willem Cramer, who were serving on DFCU’s board, of approving the transaction despite allegedly receiving warnings about the deal.
The businessman claims that an email sent in late 2016 indicated that $27.5 million (about Shs109 billion) from the sale of a portfolio of Crane loans would be paid to the central bank without being properly recorded.
Ruparelia characterises the alleged payment as part of a corrupt arrangement.
The defendants dispute the allegations.
DFCU has maintained that the disputed $27.5 million (about Shs109 billion) payment had a legitimate purpose, including the repayment of emergency support provided by the central bank.
The bank also maintains that Crane Bank was seriously undercapitalised when Bank of Uganda intervened.
DFCU has further argued that the claimants never challenged the central bank’s administration of Crane Bank before the Ugandan courts at the time.
However, Uganda’s Parliament later scrutinised the transaction.
In 2019, Parliament criticised aspects of the Crane Bank sale and concluded that the central bank had breached the law on several points.
The parliamentary findings have become part of the broader background to the dispute, although they do not by themselves determine the issues now before the London court.
Ruparelia’s case also reaches beyond Uganda’s banking sector, pointing to the involvement of international financial institutions and intermediaries.
He has cited the US conviction and imprisonment of Hong Kong intermediary Patrick Ho, who was convicted in the United States in connection with a bribery scheme involving Uganda’s then Foreign Minister.
Ruparelia alleges that Ho had been acting for a Chinese conglomerate that had previously been offered Crane Bank by the central bank.
According to the claims, DFCU entered the picture after that process.
Whether those allegations ultimately establish liability for Rabobank, DFCU or any other defendant will now be determined through the London proceedings.
Ruparelia says he can sustain legal fight
The scale of the claim is significant.
Ruparelia is seeking at least €200 million (about Shs889 billion) in damages and says he has already spent tens of millions of dollars pursuing the case.
With his fortune estimated at around $1 billion (about Shs4 trillion), the businessman says he has the financial capacity to sustain what could become a lengthy legal battle.
The defendants are being represented by leading international law firms, with Rabobank among the parties facing the claims.
The proceedings are expected to involve a substantial volume of evidence, including internal emails, presentations and confidential documents exchanged between the parties.
The case therefore places the controversial Crane Bank transaction under renewed international scrutiny, more than a decade after Bank of Uganda intervened in the institution.
For Ruparelia, the London proceedings represent another major attempt to challenge the circumstances surrounding the loss of the bank he built.
For Rabobank and the other defendants, the case provides an opportunity to contest allegations they have rejected.
The ultimate question before the London court will be whether the evidence establishes that the Crane Bank transaction caused the losses alleged by Ruparelia and whether the defendants can legally be held responsible for them.
