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BoU Sued Over Crane Bank Collapse

Bank of Uganda

Bank of Uganda is being dragged to courts of law, for what the plaintiff calls its failure to “properly supervise the business of Crane Bank Ltd (CBL),” leading its takeover early this year by BoU and ultimate acquisition by DFCU Bank.

The Central Bank, weeks after suing CBL owner Sudhir Ruparelia for alleged “fraudulent extracting” of up to Shs 400billion from the financial institution; is now being sued for failing on its supervision role.

A Ugandan named Dennis Nsereko today filed a suit against Bank of Uganda before High Court’s Civil Division, accusing it of failing to play its supervision role in accordance with Part Viii of the of the Financial Institutions Act.

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Nsereko, a former Crane Bank client claims in his suit that the Central Bank from 2013 to 2016, failed to take corrective action against Crane Bank’s financial affairs, thereby putting depositors’ funds at risk.

He now wants among others, the court’s declaration that Bank of Uganda “acted in bad faith, negligently, in breach of her duties towards him, and Ugandans in repeatedly giving CBL clean financial bills of health.

This particular claim has resonated over the past week amongst most critiques of the Central Bank in the wake of its law suit against Sudhir

Mr Nsereko also wants Bank of Uganda officials who didn’t deliver on properly monitoring CBL held responsible.

He also seeks “An order of account against (BoU) with regard to all the assets and liabilities of CBL, and application of any proceeds from all the businesses ofCBL.

Bank of Uganda remains tight lipped amidst the continuous accusations largely on social and mainstream media.

They said in a statement last Thursday that, they would not be in position to make any remarks on a matter which is before court.

 “While the Bank is cognisant of the level of public interest generated by this case, we are constrained in commenting extensively until the matter is resolved by court,” the statement read.

The Central Bank says however, that it only sued Sudhir for purposes of recovering $94Million and Shs. 60billion which he allegedly withdrew from the Bank.

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