Bank of Uganda has thrown out conflicted city lawyers of Lule and Sebalu advocates and instead appointed Joseph Byamugisha to represent them in the recent suit that was filed by city business mogul Sudhir Ruparelia.

In a notice dated May 17, 2019 to the High Court, BoU says Mr Byamugisha had been appointed as their attorney. Last month, Commercial Court kicked out Sebalu & Lule Advocates, who were on April 29, declared conflicted and therefore unfit to Sudhir or BoU in a longstanding commercial dispute.

In December 2017, the Commercial Court disqualified city lawyers Mr Kanyererezi Masembe and Mr David Mpanga from the Sh397 billion Sudhir Ruparelia’s case against Bank of Uganda (BoU), also citing conflict of interest.

In his ruling delivered on December 21, 2017, the head of the commercial court division, Justice Wangutusi stated that Mr. David Mpanga of A.F. Mpanga Advocates and Timothy Masembe of MMAKS Advocates acted in violation of the Advocates (Professional Conduct) regulations.

Bank of Uganda in October 2016 closed Crane Bank Limited, previously one of the best performing banks before controversially selling it Dfcu Bank in January 2017 for a paltry Shs200 billion. The central bank has since come under the spotlight after the closure Crane Bank Ltd backfired with both Parliament and the Auditor General faulting the BoU officials in the middle of the transaction.

Deputy Registrar of the Commercial Court Festo Nsenga on Monday April 29, 2019 delivered a ruling in which city businessman Sudhir Ruparelia emerged the victor after seeking dismissal of Sebalu & Lule Advocates from a case involving Crane Management Services Limited (CMS) and Dfcu Bank Limited which had hired the law firm to defend it in a suit where CMS was seeking rent arrears of about Shs3 billion as well as recovering US $385,728.5 from the bank.

The Commercial court is yet to hear the pending applications in the case between Bank of Uganda (BoU) and Ruparelia over sale of Crane bank to Dfcu bank. The BoU sued Ruparelia and his Meera Investments Company for allegedly fleecing Crane bank of Shs397 billion in fraudulent transactions and transfers.
The third application was filed by Ruparelia, demanding dismissal of BoU pleadings. Crane bank was taken over by the central bank on October 20, 2016 and later sold to Dfcu bank in 2017. Ruparelia has denied the fraud accusations and instead counter-sued the central bank, seeking compensation of about Shs28 billion in damages for breach of contract between him and BoU.

However, April 29th’s ruling means that BoU and Dfcu Bank cannot hire any lawyers that were in the past employed by any company of the Ruparelia Group on the grounds that such lawyers or law firms have a privilege to some information that they can use against Sudhir and his companies, thus creating a scenario of conflict of interest as agreed by Justice Paul Gadenya Wolimbwa who said there exists an Advocate-client relationship between Sebalu & Lule Advocates and Meera Investments, a member of the Ruparelia Group.

Further the ruling which is a precursor to the main ruling puts BoU in a weaker position as officials BoU were hoping to bank on the knowledge of Sebalu and Lule Advocates in regard to Ruparelia Group businesses. Now they will have to look elsewhere for lawyers who have never worked for Sudhir. It will be hard for new lawyers to present evidence pinning Sudhir.

The ruling also came after parliament’s Committee on Commissions, State Authorities and State Enterprises (COSASE) established that Shs478 billion BoU claimed it put in Crane Bank during receivership was not all used as Shs320 billion is not accounted for. Interestingly CBL needed only Shs150 billion to remain operating, yet BoU handed over CBL assets to Dfcu Bank at Shs200 billion. BoU will have to prove how Sudhir fleeced CBL of Shs397 billion in alleged fraudulent transactions and transfers.

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Uganda on Friday again blamed Rwanda for failing to lift an embargo on her goods destined for Rwandan market.

The Minister of Foreign Affairs Sam Kutesa made the claim while briefing the diplomatic corps in Kampala on the status of the Uganda-Rwanda relations and warned that any local or foreign threats against Uganda will be dealt with decisively whenever and wherever they occur.

On Rwanda’s restriction Uganda’s exports Kutesa said: “Export of Ugandan goods to Rwanda has been prohibited by Rwandan authorities. The same authorities have introduced an export permit system for people that intend to export goods to Uganda, which is practically impossible to obtain. I have previously described this as a trade embargo, which indeed it is.”

Kutesa continued: “Government of Uganda has not restricted any movement of goods and people from Uganda into Rwanda. The movement of people from Uganda to Rwanda has continued normally. This is consistent with our regional and 3 international obligations. What has continued to exist are the restrictions on the movement of goods and Rwandan citizens from Rwanda to Uganda.”

Closure of the Katuna border

Kutesa told diplomats that the decision by Rwanda to close Katuna border, which is a One Stop Border Post, was unilateral, sudden and took the Government of Uganda by surprise. “Rwanda diverted all traffic to Mirama Hills and Cyanika Customs Border Posts. The sudden closure of Katuna border post led to congestion and delays at Cyanika and Mirama Hills, resulting into increase in the cost of doing business and loss of business, especially of perishable goods,” he said.

He said the initial reason given by the Government of Rwanda for the closure was that they were going to carry out some repairs at the Katuna One Stop Border Post. “Whereas it is Rwanda’s sovereign right to carry out the repairs, courtesy would have required them to inform the Government of Uganda in advance about the repairs that would impede travel between the two countries across an international border. This would have been consistent with the methods of work employed by the two countries sharing the One Stop Border Post,” he said but the minister added that it turned out that the reason for closing the border was actually not to carry out repairs, but the closure was due to “political reasons.”

Allegations of restricting business with Rwanda

The minister said it was not true that Uganda has restricted business with Rwanda, stating that on the contrary, Uganda has been a vocal advocate for regional integration and building closer connectivity in trade between us and our neighbours, including Rwanda. This is essential for our common prosperity. It is, therefore, unfortunate that the movement of goods and people across our common border has been restricted, he said.

He said the restriction of business harms the economies and social interaction and also threatens the integration efforts under the East African Community, “which we have all worked hard to build.”

“Many of the people whose movement is being restricted have relatives found on either side of the border. Uganda is committed to addressing any trade related issues, because we are convinced that doing so strengthens our regional integration and also helps us integrate faster into the global economy,” he said.

Allegations of arrest, torture and harassment of Rwandans

The minister said that much as Rwanda has alleged illegal arrest, torture and harassment of Rwandans in Uganda, it is not true. “This also is totally false. Rwandans are welcome to visit Uganda. However, Uganda expects Rwandans who visit Uganda, just like any other visitors, to be law abiding. Anyone who breaks the law will be dealt with in accordance with the law,” he said.

He said several Rwandan nationals who have been arrested for breaking the law have either been charged in courts of law or deported back to Rwanda. “In addition, a number of Rwandan security operatives have been entering Uganda without following laid down procedures governing entry of security personnel into the country. A number of these, when apprehended, have been deported back to Rwanda,” he said.

The minister said Uganda takes seriously its duty and obligation to protect the security of its citizens and its borders. “Any local or foreign threats will continue to be dealt with decisively whenever and wherever they occur,” he said.

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