BoU Lawyers Appear Before Parliamentary Committee

Earlier today lawyer Timothy Masembe of MMAKS Advocates appeared before the Ugandan parliament’s Committee on Commission, Statutory Authorities and State Enterprises (COSASE) to answer questions relating to the controversial Crane Bank saga. 

The committee is looking into events surrounding the closure of seven commercial banks between 1993 and 2016, including allegations that Crane Bank Limited (CBL) was illegally and unfairly taken over by Bank of Uganda (BoU) officials in October 2016 before being sold on to dfcu bank in January 2017.

In their written statement to the committee MMAKS clarified that the firm has been one of the Bank of Uganda’s (BoU’s) retained lawyers since 1972 and services the BoU through a retainer agreement. They also confirmed that in the case of Crane Bank that they were additionally instructed to recover the sum of USD$75,000,000 from CBL’s principal shareholder, Sudhir Ruparelia, which represented “the net loss to the Ugandan taxpayer by reason of the intervention and injection by the Government of Uganda of this sum to pay off the Bank depositors after setting off the net cash payment of UGX 2008 paid by DFCU.”

According to the statement provided by MMAKS a 13th January 2017 PWC Forensic Audit report had established that the loss was the result of diversion by Ruparelia of CBL’s monies and properties for his personal benefit.  

MMAKS then oversaw negotiations with Ruparelia and his lawyer in order to agree a negotiated settlement whereby Ruparelia would pay the Ugandan taxpayer US$60 million and return 47 bank branch network freehold/mailo titles. The advocates further confirmed that following the agreement they had recovered a sum of USD$14,358,898.

The appearance of the lawyers before the committee follows comments from the Ugandan finance minister Matia Kasaija in which the minister claimed that former Crane bank owner and major shareholder Sudhir Ruparelia had been fed up with the bank and happy to let it go. He also claimed that Ruparelia was unreceptive to suggestions that he free up some capital from his other businesses in order to plug the bank’s financing hole of Shs400bn.