Crane Bank Saga: Mirundi Warns of Capital Flight

Presidential Advisor on Media Affairs Tamale Mirundi

Presidential Advisor on Media Affairs Tamale Mirundi has warned that failure by the government to properly manage the effects of Crane Bank collapse will affect Foreign Direct Investment in Uganda.

“On the international level, people will run away. Credible investors will run away,” said Tamale Mirundi on Saturday.

Mirundi said that government institutions should do more to manage the situation as businessman Sudhir Ruparelia’s destruction will cast the economy in bad light.

“No one is complaining that their money was lost. This second phase of actions against former Crane Bank officials will not encourage genuine investors to risk their money here,” he added.

In an interview, Mirundi said if the situation is mismanaged, Uganda will attract poor ratings by international institutions hence killing confidence in the market.

The Central Bank recently said in a statement that it’s only motivation is to recover money estimated at Shs300bn reportedly siphoned from Crane Bank by Ruparelia.

The statement further indicated that Bank of Uganda could not give more information as the matter is before court.

Sudhir is yet to speak out on the alleged fraudulent activities at Crane Bank but it’s understood his lawyers are drafting the defence.

The controversial Mirundi also observed that influential Bakiga are “reclaiming their bank”, in reference to National Bank of Commerce seized by the central Bank and handed to Crane Bank a few years ago.

“If government was worried of investment, its efforts should have ensured damage was contained,” said Mirundi, adding, “Any disclosure of such magnitude would scare genuine investors.”

Once a country is seen as too risky, according to analysts, no foreign financial institution and non-banks financial institution is willing to do business with such a country.

The International Monetary Fund (IMF) recently urged the Central Bank to strengthen its supervision of commercial banks, a recommendation the institution vowed to take seriously.

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