Former shareholders of the defunct National Bank of Commerce (NBC) have expressed interest in taking part in a case lodged by the Central Bank against businessman Sudhir Ruparelia.
The move could see the case take a fresh twist and drag in several other players in the audit, banking and pension sectors.
Amos Nzeyi and Rtd Bishop William Ruchirande say in their petition to the High Court registrar that Bank of Uganda which revoked the NBC license and sold its assets to Crane Bank on September 27, 2012 is now “accusing its proprietors of engaging in serious bank fraud committed before and after the sale of NBC.”
Represented by lawyers Muwema & Co Advocates, the petitioners further state that the ”rush takeover, winding up, liquidation, closure and sale of NBC to Crane Bank without following the due process of the law, is a continuation of and or part of the fraud orchestrated by Crane Bank and its proprietor which is the subject of the above suit.”
They contend that the alleged fraud could not have been committed “without the collision of Bank of Uganda or some elements therein.”
A former banker, who preferred anonymity so as to speak freely, told ChimpReports on Tuesday that NBC was “closed and sold in less than a day – that’s a global record.”
Bank of Uganda has since denied having any other interests in the matter apart from recovering the allegedly lost funds amounting to Shs 300bn.
“We wish to assure the public that any allegations that the suit is being brought by the Bank of Uganda and/or its lawyers for purposes other than the recovery of the funds and properties due to Crane Ban are false,” the Central Bank said in a statement last week.
“While the Bank is cognizant of the level of public interest generated by this case, we are constrained in commenting extensively until the matter is resolved by court.”
However, Nzeyi and his colleague insist on accessing the case file to determine “the appropriate remedy and/or course of action to investigate the extent to which Sudhir Ruparelia, Crane Bank or Bank of Uganda are culpable for loss and damage caused to NBC” and its clients.
Lawyer Fred Muwema says his clients they have not been able to access the file at the registry’s office for the past one week.
But Solomon Muyita, a communications official with the judiciary was quoted by Daily Monitor as saying the file was taken by the judge who is studying it.
Meanwhile, the NBC shareholders say upon receiving the file, “we shall apply to join the above suit to avoid multiplicity of suits or maintain a separate suit.”
Experts told this website that, “As long as they (NBC) can prove that BoU by error or commission knew about the irregular ownership of Crane Bank, the subsequent sale and acquisition of NBC becomes null and void.”
Former Prime Minister Amama Mbabazi was among the shareholders in NBC which the Central Bank said was undercapitalized before being taken over.
On the other hand, the move was seen as aimed at weakening Mbabazi’s financial muscle as he prepared to stand for president, a charge government vehemently denied.
The experts further told us that the Central Bank “should have Standard Operating Procedures (SoPs) for closing any bank, a forensic audit being one of the key elements.”
They went ahead to argue that the work of NBC lawyers is half done as the central bank suit against Crane Bank makes among many allegations relying on forensic reports that Sudhir ‘solely owned’ Crane Bank.
While this remains unproven, it ironically confirms “prolonged failure by Bank of Uganda to adequately supervise Crane Bank,” the expert observes.
The petitioners said accessing the file will help them address several questions including determining the whereabouts of NBC assets seized by the Central Bank and possible restoration of the defunct financial institution’s license.
They further claim participating in the case will allow them establish whether “Bank of Uganda and its officers are liable for breach of non-delegable statutory duty, statutory negligence and/or misfeasance in public offie.”
The petitioners added: “It is our considered view that that these and other questions might be better answered within the above existing suit. Alternatively, since any decision or settlement of the matter will affect the rights of our clients, it is imperative that they be heard above any settlement or decision in any event.”