It was sanctioned by Parliament through its investigative committee- COSASE that DFCU bank unlawfully and fraudulently took over Crane Bank in 2017, which belonged to billionaire Sudhir Raprelia.
The controversial sale by Bank of Uganda hinged on claims that Crane Bank was grossly insolvent and couldnt be recapitalized.but rather sold.
Bank of Uganda officials superintended by the former Executive Director in Charge of Supervision, Justice Bagyenda then sourced for a bank that would buy off the liabilities and assets of Crane Bank.
The deal was signed in January 2017 after BoU claimed it had injected shs 480 billion as the bank was under receivership, a statement which COSASE investigators poked holes as shs 270 billion sunk in Crane Bank couldnt be traced.
The hostile takeover of Crane Bank, triggered a through audit by the Auditor General Mr. John Muwanga whose findings on sale of 7 private banks left Ugandans wondering why Bank of Uganda would opt to suffocate someones business, particularly Crane Bank.
Against Mr. Muwangas report, Kadaga instructed Hon Abdul Katuntu to make more investigations on the closure of the seven financial institutions.
More dirt was unearthed by COSASE in its report and made many recommendations, including penalizing BoU officials who were found reliable for the mess of seven banks and also compensate the Banks owners.
The Seven Banks closed fraudulently by the Central Bank include Teefe, Uganda Cooperative Union, Global Trust, Crane Bank, National Bank of Commerce Greenland.
The Central Bank administration failed to raise inventory reports of most of the banks it closed and therefore, investigators were unable to value their assets and liabilities.
On the case of Crane Bank, in assuming its operations, DFCU didnt negotiate the acquiring of its Bad Loan Book as a liability.
Usually when taking over a liquidated bank, the buyer does through analysis on its liabilities so as to negotiate with the regulator which liabilities to reject or take.
One of the factors Bank of Uganda raises that catapulted to the closure of Crane Bank was the under performing loans that resulted to liquidity crisis at Crane Bank.
However, as a requirement, Sudhir had deposited over shs 200 billion as security which was used to clear depositors.
This means, Sudhirs account in Bank of Uganda has been eroded and he could only recover the money through accessing the bad loan book.
It is assumed that borrowers staked securities as they sought loans from Crane Bank and had agreement to certain terms in the event that they failed to service their loans.
Sudhir then was supposed to sell securities to recover his cash.
However, this website learnt that on orders of BoU deputy Governor Mr. Louis Kasekende and Director Justine Bagyenda, DFCU hid the bad book.
The narrative is that the two parties dont want Sudhir to recover his money by selling loan securities, or DFCU colluding with BoU have been using the bad book to access security and selling them off secretly.
His efforts to request DFCU to return the book have been unsuccessful.
In our investigation, we established that Mr. Ruparelia can legally drag DFCU and BoU together to Court as an avenue of recovering the Bad Book.
Sudhir can out rightly base on COSASE report and sue DFCU and Bank of Uganda.
The grounds are; that as legislature, Parliament is recognizable arm of government that makes laws.
Therefore, such a competent institution poking holes in DFCU and BoU is evident enough that the institutions managers can be held culpable.
Also, following the findings and recommendations of Parliament, because it doesnt enforce the law but rather makes the law, several law enforcement agencies like DPP, IGG, CIID should have taken over the the matter of DFCU and BoU and launch fresh investigations and prosecute those found guilty.
In that regard, Sudhir can instruct his legal team to pursue the same channel by lodging a petition demanding DFCU to return shs 570 billion Bad Loan Book.