Kampala Associated Advocates, the law firm representing Dr. Sudhir Ruparelia, has dismissed as “inaccurate and false,” the contents of a media statement made by Bank of Uganda regarding its intended appeal against their two-time loss to Dr. Sudhir, most recently in the Court of Appeal.
On Tuesday, June 23rd, 2020, three Court of Appeal Justices, Alphonse Owiny Dollo; Cheborion Barishaki and Stephen Musota unanimously dismissed all the nine (9) appeal grounds on which Bank of Uganda through Crane Bank (In Receivership) had sought to overturn an earlier August 26th, 2019 ruling by Commercial Court Judge, Hon Mr. Justice David K. Wangutusi.
Justice Wangutusi, ruled in favour of an application by Dr. Sudhir’s lawyers that BoU’s claims against the businessman did not stand since they failed on all preliminary principles of law and therefore the court could not go ahead to hear them. Delivering their ruling in Civil Appeal 252 of 2019, the three Court of Appeal justices also agreed with Justice Wangutusi and they, too, dismissed both the appeal and BoU’s main case. BoU was also ordered to pay costs, both at the Court of Appeal and the courts below.
Subsequently, Bank of Uganda on 30th June 2020 made a statement in print and on social media to the effect that they would appeal the Court of Appeal ruling in the Supreme Court, but went ahead to make several allegations against the businessman in their statement, allegations that have now been trashed by KAA.
In a strongly-worded statement, KAA lawyers on behalf of Dr. Sudhir clarified that Bank of Uganda’s case (High Court Civil Suit 493 of 2017) was found by both the High Court and Court of Appeal as “not legally tenable as there was no cause of action” and “accordingly dismissed.”
“There is no court in any part of the world that can proceed to hear a case where no cause of action is disclosed. In both the High Court and the Court of Appeal, the Bank of Uganda addressed the Courts urging them to ignore the fact that it had no cause of action and proceed to hear the case anyway,” the lawyers explained, adding: “Bank of Uganda was inviting the courts to ignore the law. Both Courts rejected this legally untenable plea that is now being made in the press.”
The lawyers, quoted from the ruling by the three Court of Appeal justices that said: “The Appellant {Bank of Uganda} raises an issue that the court ought to have overlooked the preliminary objections and instead looked at the matter on its merits… we respectfully disagree with the Appellant that if a pleading does not disclose a cause of action or locus standi, the courts should still inquire into the merits of the main case. That would be an action in futility. The courts are not meant to award moot judgments. If a person has no cause of action, then the merits of the case cannot be inquired into lest the court may end up condemning a party who should not have been condemned.”
The lawyers also urged BoU not to disrespect the Courts of law and said that if the Central Bank was unhappy with the decisions of the Court, “the legal remedy is to file an appeal and not to criticize the court in the press.”
Sudhir’s lawyers, challenge BoU claims on money injected into Crane Bank
The lawyers also took exception to media claims by BoU that taxpayers’ money was used to settle Crane Bank depositors, saying that up to today, BoU had failed to prove to the Auditor General, the parliament, and to Crane Bank’s shareholders that the said money was spent on depositors.
“Independent inquiries conducted by both the Auditor General and the Parliament of Uganda (COSASE Committee) have all reported that there was no evidence to support Bank of Uganda’s claims that taxpayers’ money was allegedly spent on paying depositors. Money went missing from Bank of Uganda and remains unaccounted for. Ever since Bank of Uganda took over Crane Bank, it has not published any audited accounts of the Crane Bank. There are no audited accounts for the period of Statutory Management or Receivership. This means that there are no documents of Crane Bank Limited that prove the Bank of Uganda’s allegation that it injected taxpayers money into Crane Bank,” the lawyers said.
The lawyers also referred to an oath made by BoU’s Head of the legal department in the High Court in which she “stated on oath that Bank of Uganda had not made any loss of money on account of Crane Bank and that it had no legal interest in any case against shareholders.”
How Stanbic Bank CFO Ronald Makata Blends Governance, Technology and Human Leadership to Drive Performance“This statement on oath means that Bank of Uganda did not inject into Crane Bank any taxpayers’ money. In direct contradiction of this oath and pleadings filed in court, Bank of Uganda now claims in the press that it is seeking taxpayers’ money that it had used to pay depositors. Bank of Uganda’s auditors stated that the money Crane Bank Limited needed to survive was only UGX130 bn. Bank of Uganda alleges (without evidence or any rationale) that it injected UGX497 billion into Crane Bank and has failed to account for it as shown by both the COSASE and Auditor General’s Reports,” the KAA statement said.
Dr. Sudhir did not extract any money from Crane Bank
KAA also challenged BoU claims in the media statement that Dr. Sudhir extracted USD92 million from Crane Bank.
“Crane bank was subjected to numerous annual, quarterly, and special audits, and all its financial statements were approved every year by the Bank of Uganda without reservation of any kind. Not one of them alleged any extraction by Dr. Sudhir Ruparelia. This allegation is absurd,” said the lawyers.
The lawyers also dismissed the so-called forensic audit/investigation into Crane Bank as unreliable and one-sided as the investigators did not interview Dr. Sudhir Ruparelia, or the Managing Director or the Executive Director of the bank as required under forensic audit guidelines.
“A forensic audit cannot make conclusions without hearing both sides of an issue. This irredeemably taints the so-called forensic investigation and makes the findings unreliable. A one-sided forensic investigation is not an objective investigation and cannot stand up to legal scrutiny. The official reason given by Bank of Uganda to the public for the takeover of the management of Crane Bank Limited was undercapitalization due to provisioning for non-performing loans, not the so-called extraction that is alleged in the press statement, which is an attempt to soil Dr. Ruparelia’s image,” the lawyers said.
Also dismissed, was a claim that Dr. Ruparelia owned 100% of Crane Bank, saying that “all the shareholders of Crane Bank were vetted and approved by the Bank of Uganda in accordance with the Financial Institutions Act.”
The lawyers reiterated that if Bank of Uganda was aggrieved by the judgment of the Court of Appeal, the “appropriate remedy should be to seek to reform the law and amend the statute.”
“It (BoU) should not be to criticize the Courts in the press as it has done,” said the lawyers, adding: “It is not the Judgments of the High Court and Court of Appeal that restrict the powers of Bank of Uganda in resolution of closed banks as suggested by the Bank of Uganda in the press statement. Both judgments stated clearly that the limitation on Bank of Uganda’s powers are found in the Financial Institutions Act.”
In conclusion, the KAA lawyers said that: “Dr. Sudhir Ruparelia reserves the right to challenge these malicious and ill-founded allegations” in courts of law.
