'Sudhir stole from Crane Bank,' BoU claims, appeals case

Central Bank has insisted they will appeal the case against property magnet Sudhir Ruparelia to the supreme court after the same was dismissed in the Court of Appeal.

Central Bank has sued Sudhir for accusing him of using his Meera Investments company to siphon Shs397b from the coffers of his own Crane Bank.

However, Court led by Deputy Chief Justice Alfonse Owiny-Dollo unanimously dismissed the case with costs after finding no evidence in Central Bank’s allegations.

In a statement by governor Emmanuel Tumusiime Mutebile on Tuesday, the Central Bank insists that receivership does not take away the corporate personality of a company which includes the right to trace and recover assets and the right to sue for those assets.

Central Bank maintains Sudhir wrongfully and illegally extracted from Crane Bank amounts totaling to USD 92.8m and 8.2billion, while he (Sudhir) secretly and illegally owned 100 percent shares in the bank, which contravenes the Financial Institutions Act 2004.

Central Bank also accuses Sudhir of transferring freehold property beneficially owned by Crane Bank into the names of Meera Investments Ltd, which he and his family are majority shareholders, without giving value to Crane Bank and rendering the bank a tenant on its own property with a liability to pay rent to his family business.

Mutebile now challenges the courts to express themselves on claims by Central Bank that Sudhir siphoned money from Crane Bank coffers, which is the intention of Central Bank’s main suit.

He claims that the implications of dismissing the Sudhir case may mean that a financial institution cannot pursue or seek recovery of assets of a bank in receivership by way of legal proceedings.

“This renders the principle of tracing and preserving assets of an insolvent bank during statutory management and receivership futile,” Mutebile said in the statement.

“The judgment also sets a precedent that limits the Central Bank’s capacity to resolve banks in a manner that ensures accountability for mismanagement of depositor funds and promotes corporate governance in the banking industry,” Mutebile adds.

Central Bank maintains that for such reasons, they are dissatisfied with the rulings of both High Court and Court of Appeal and ‘has taken decision to appeal to the Supreme Court in addition to the pursuit of other legal recovery options.”