Dfcu Bank has started the process of vacating Dr Sudhir Ruparelia’s properties, wrongfully passed onto them by Bank of Uganda.
Several movers were seen at dfcu Bank’s Crane Chambers, on Plot 38 Kampala Road, loading dfcu property and equipment onto trucks on Saturday, February 01st 2020. A notice at the bank said that the “Kampala Road Branch will be relocating to its new premises effective Monday 3rd February.”
“The Branch will remain closed for two days on Friday 31st January and Saturday 1st to enable us to relocate to new premises,” reads a notice, adding that: “During this period you can access our services at Market Street.”
“We put out a notice for some branches (that are shifting), but there will be a notice out on Monday for all the branches that have relocated,” Rukh-Shana Namuyimba, the dfcu Bank Communications & Events Manager told this reporter via WhatsApp.
According to a notice seen by this reporter, the Kampala Road Branch is relocating next door to Plot 40 Kampala Road. Also affected will be 6th Street Branch which is moving to Plot 116/118, 6th Street Industrial Area, as well as the Luwum Street Branch that moves from Plot 35, Luwum Street to Plot 29 on the same street. The Banda Branch will move from Plot 48/50 Mukabya Road to Shell Kyambogo on Jinja Road, while the ATM, previously at Kabira Club, will move to Shell Kira Road, Bukoto.
According to information earlier obtained by CEO EA Magazine, dfcu’s Jinja town branch, currently located on Plot 55 Main Street, will also be relocated to Plot 10 Scindia Road while the Mbarara branch will be moved from Plot 73 High Street to Plot 53 High Street. The dfcu Kikuubo Branch will be moved from Plot 4 Nakivubo Road to Plot 15 Nakivubo Road, Unifam House.
In total, 22 branches are to be shifted to new locations.
Why is dfcu moving branches?
During the contested sale of Crane Bank to dfcu Bank in January 2017, dfcu inherited leases held by Crane Bank from Meera Investments, the owners of the 48 properties. The central Bank further undertook to recover and hand over to dfcu, the vacant and freehold possession of the 48 properties within 24 months. Dfcu was also granted the first rights to buy the said properties. According to the sale agreement, if BoU failed to recover the land and buildings within the 24 months, dfcu would have an option to rescind the purchase of the leasehold properties and return them to BoU and be compensated.
Diageo to Exit East African Breweries as Asahi Takes ControlBoU, in High Court Civil Suit No. 493 of 2017 proceeded to sue Meera Investments and businessman Dr. Sudhir Ruparelia, seeking to reclaim the said properties.
However, even before court could pronounce itself on the ownership of the properties, dfcu Bank prematurely and on the advice of their lawyers, Sebalu & Lule Advocates, transferred Crane Bank’s leases into their names, without the approval of Meera, the owners of the properties as required by law, prompting Meera to sue. In the case (High Court Civil Court Suit No. 948 of 2017), Meera challenged the transfer as an “illegality”, a “fraud” that is tantamount to “trespass.”
However, dfcu in a defense filed on 28th January 2018 by Sebalu & Lule Advocates, Dfcu had argued the that the ownership of the properties was “still subject to a court decision in High Court Civil Suit No. 493 of 2017 and therefore it was premature for Meera to claim them.”
Hon Justice David Wangutusi of the High Court on August 26th dismissed BoU’s attempts to recover the said 48 properties, saying that “any orders awarding delivery of freehold titles to the Plaintiff/ Respondent (Crane Bank (in receivership)) would be illegal and barred in law,” since Crane bank “cannot hold freehold and any pleadings seeking court orders to that effect amount to no cause of action.”
A frustrated dfcu, following the damning court ruling, and the expiry of the 24 months in January 2019, in a 12th September 2019 letter to BoU, told the Governor and Executive Director, Bank Supervision at BoU that dfcu was no longer interested in buying the 48 properties and wanted to be refunded their money.
“Following court’s dismissal of HCCS No 493 of 2017 on 26th August 2019, it is unclear how long it will take BoU to recover the reversion from MIL (Meera). This state of affairs creates uncertainty for the bank which is prejudicial to its business interests. In line with its strategic interests and risk management framework, the board has resolved that it is in the best interest of the bank to exercise the option to rescind the purchase of the MIL Properties. The bank hereby rescinds the purchase of the MIL properties pursuant to clause 8.7 of the Agreement,” wrote dfcu Bank’s Managing Director, Mr. Mathias Katamba and a one Agnes Mayanja.
Dfcu reportedly wants to be paid UGX47 billion for the properties, yet the same properties, at acquisition were reportedly valued at and bought for UGX10 billion, yet they have been occupying the properties for nearly 3 years without paying rent.
Dfcu Bank’s move to move out of the contested buildings, however does not spare them, yet as the trespass and fraudulent transfer of Meera investments’ property in the Land Division of High Court is yet to be decided. dfcu is also separately facing up to UGX35bn in legal suits from Ruparelia Group’s Meera Investments and Crane Management Services for severally breaching rental contracts it inherited from Crane Bank.
