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Sudhir protests to Speaker over COSASE’s planned probe of a property case already determined by court

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The Ruparelia Group Chairman and Meera Investments Managing Director, Dr. Sudhir Ruparelia, has written to the Speaker of Parliament, Rt Hon Rebecca Kadaga, protesting a planned move by the Public Accounts Committee on Commissions, State Authorities and State Enterprises (PAC – COSASE) to investigate a property owned by tycoon, whose ownership was heard and decided by court in 2012.

COSASE has started probing reports of alleged fraudulent acquisition of properties of the Asians who were expelled during Idi Amin’s regime. The properties have been under the management of the Departed Asians’ Property Custodian Board, a government body, since 1983.

It is believed, to date more than 1,676 properties have either been sold, repossessed, and or compensated by 2009, while some 3,226 remain unsold and unclaimed.     

In a 14th August 2019 letter, also copied to the Chief Justice, Bart Katureebe, Dr. Ruparelia said they wanted to seek “clarification and guidance” from the Speaker, “whether Parliament can inquire into a matter where a decision of court has been made or where a matter is in court.”

“We have followed part of the ongoing COSASE inquiry regarding Departed Asians’ Properties Custodian Board through televised and print media. A property that belongs to Meera Investments Limited has been mentioned as part of the inquiry. That property is Plot 24, Kampala Road, Kampala (Freehold Register Volume 1062 Folio 1),” wrote Dr. Ruparelia.

“Rt. Hon Speaker in 2012 the Custodian Board claimed that former owner did not return to Uganda to manage the property and therefore the property belongs to the Custodian Board and was by the state of their pen under their management. Having bought the property and owned it since 1995 we went to High Court for Judicial Review under LD CR 16 of 2012 to challenge the Custodian Board’s claim,” he further wrote, adding: “High court listened to us and also listened to Custodian Board (represented by the Attorney General) and made a decision on 20th December, 2012 in our favour.”

Meera are the lawful owners

According to court records, in his judgement, Justice Joseph Murangira said that Meera Investments approached the former owners of that land Rameshchandra Bhowan Kataria and the late Kershavlal Premchard Shah before they were granted a certificate of repossession and they agreed to sell their estate and interest in the property.  

The judge also stated that the documents of evidence presented in court by Meera Investments show that Sudhir bought the property from the original owners and that the authenticity of these documents was not challenged by the respondents (DAPCB) and were therefore taken to have been admitted by the respondents.

Court also found and agreed with Meera Investments that in fact Meera had been made to pay twice for the same property- first from Greenland Bank and second time from the former owners) and ruled that “the respondent (Custodian Board) by its conduct is estopped (barred or precluded) from laying claims over the suit property that under the law belongs to the applicant (Meera).”

“The applicant (Meera Investments) is the lawful owner of the land comprised in Freehold Register, VOlume 1082 Folio 1, Plot 24 Kampala Road,” ruled Justice Murangira on 20th of December 2012.

“An order of prohibition against the respondent (DAPCB) to stop enforcement of the above decisions is granted to the applicant (Meera Investments). The respondent is accordingly prohibited from enforcing its decisions as against the applicant,” he further ordered.

The Custodian Board did not appeal.

In his letter, Dr. Ruparelia wondered whether it was right that “whenever matters in court come to an end, parties can come to Parliament for another decision.”

Both the Speaker and Chief Justice are yet to respond, but copies of the letters seen by this website, indicate both letters had been received by the respective offices. 

The Ruparelia Group Chairman and Meera Investments Managing Director, Dr. Sudhir Ruparelia, has written to the Speaker of Parliament, Rt Hon Rebecca Kadaga, protesting a planned move by the Public Accounts Committee on Commissions, State Authorities and State Enterprises (PAC – COSASE) to investigate a property owned by tycoon, whose ownership was heard and decided by court in 2012.

In the 14th August 2019 letter, also copied to the Chief Justice, Bart Katureebe, Dr. Ruparelia said they wanted to seek “clarification and guidance from you whether Parliament can inquire into a matter where a decision of Court has been made or where a matter is in Court.”

“We have followed part of the ongoing COSASE inquiry regarding Departed Asians’ Properties Custodian Board through televised and print media. A property that belongs to Meera Investments Limited has been mentioned as part of the inquiry. That property is Plot 24, Kampala Road, Kampala (Freehold Register Volume 1062 Folio 1),” wrote Dr. Ruparelia.

“Rt. Hon Speaker in 2012 the Custodian Board claimed that former owner did not return to Uganda to manage the property and therefore the property belongs to the Custodian Board and was by the state of their pen under their management. Having bought the property and owned it since 1995 we went to High Court for Judicial Review under LD CR 16 of 2012 to challenge the Custodian Board’s claim,” he further wrote, adding: “High court listened to us and also listened to Custodian Board (represented by the Attorney General) and made a decision on 20th December, 2012 in our favour.”

Meera are the lawful owners

According to court records, in his judgement, Justice Joseph Murangira said that Meera Investments approached the former owners of that land Rameshchandra Bhowan Kataria and the late Kershavlal Premchard Shah before they were granted a certificate of repossession and they agreed to sell their estate and interest in the property.  

The judge also stated that the documents of evidence presented in court by Meera Investments show that Sudhir bought the property from the original owners and that the authenticity of these documents was not challenged by the respondents (DAPCB) and were therefore taken to have been admitted by the respondents.

Court also found and agreed with Meera Investments that in fact Meera had been made to pay twice for the same property- first from Greenland Bank and second time from the former owners) and ruled that “the respondent (Custodian Board) by its conduct is estopped (barred or precluded) from laying claims over the suit property that under the law belongs to the applicant (Meera).”

“The applicant (Meera Investments) is the lawful owner of the land comprised in Freehold Register, VOlume 1082 Folio 1, Plot 24 Kampala Road,” ruled Justice Murangira on 20th of December 2012.

“An order of prohibition against the respondent (DAPCB) to stop enforcement of the above decisions is granted to the applicant (Meera Investments). The respondent is accordingly prohibited from enforcing its decisions as against the applicant,” he further ordered.

The Custodian Board did not appeal.

In his letter, Dr. Ruparelia wondered whether it was right that “whenever matters in court come to an end, parties can come to Parliament for another decision.”

Both the Speaker and Chief Justice are yet to respond, but copies of the letters seen by this website, indicate both letters had been received by the respective offices. 

Commercial Justice

I did not buy any property from the Departed Asians Property Custodian Board, Sudhir tells off COSASE

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The imposing Kampala Boulevard erected by Meera Investments on Plot 24 which in 2012 was declared by Court as belonging to Dr. Sudhir Ruparelia's Meera Investments. The tycoon has protested to parliament arguing that matters decided by court cannot be investigated by parliament

The Ruparelia Group Chairman and Meera Investments Managing Director, Dr. Sudhir Ruparelia, has declined to appear before Parliament’s Committee on Statutory Authorities and State Enterprises (COSASE) investigating acquisition of properties from the Departed Asians Properties Custodian Board (DAPCB) saying he did not buy any property from the board and therefore does not understand why he should appear before the Hon Ibrahim Kasozi– led select committee.  

COSASE had invited Sudhir to appear before the committee to explain how he acquired five properties that a whistle blower alleged were never repossessed from DAPCB and should be in government possession.

The businessman did not show up for the hearing scheduled for December 4th but instead, his lawyers Walusimbi & Co. Advocates had on Tuesday, December 3rd  written to the COSASE Chairperson Ibrahim Kasozi asking why their client should appear before Parliament.

“He (Sudhir) requests for your advice as to why his presence is required, especially it being that he has never purchased any property from the DAPCB, nor has he claimed property on behalf of anybody.”

On the same Tuesday, Kasozi wrote back naming five properties that the committee is interested in.  The properties are Plot 23 on Jinja Road, Plot 24 on Kampala Road, Plot 5 on Colville Street, Plot 3 and 5 on Bombo Road in Kampala and Plot 26 on Republic Street in Mbale. He went ahead to insist that Sudhir should appear before the  committee.

Sudhir’s lawyers wrote back on the same day. Saying: “Our client reiterates that he has in all instances not purchased any of the said properties from the Departed Asians Custodian Board, which your esteemed committee is inquiring into.”

Sudhir, through his lawyers denied ownership of the said Plot 43, Jinja Road. The lawyers also argued that Plot 24 on Kampala Road was resolved by a court decision between Meera Investments Ltd and DAPCB and can’t be subjected to a parliament inquiry.

Nelson Walusimbi, Sudhir’s lawyer also adduced evidence by way of a title with transfer details indicating that the tycoon is a bonafide purchaser of Plot 8 Colville Street from the then registered proprietor, Uganda Theatres Limited and Plot 26, Republic Street Mbale was purchased from Nakasero Soap Works.

Plot 3 and 5 Bombo Road were purchased from Joint Ven (U) Ltd.

In all the mentioned cases, Meera Investments did not buy the land from DAPCB, but from other 3rd party sources and is therefore a bonafide purchaser. As per the case of Lwanga vs. The Registrar of Titles (1980) HCB 24, a bonafide purchaser for value is a person who acquires a proprietary interest in land without any notice of fraud and for value.

 “Our client requests for specific information about any possible dealings the honourable committee estimates he may have had with the statutory body so that he responds to those,” Walusimbi wrote.

On 14th  August, Dr Sudhir Ruparelia had written to the Speaker of Parliament, Rt Hon Rebecca Kadaga, protesting COSASE’s planned move to investigate a property owned by tycoon- Plot 24, Kampala Road, Kampala whose ownership was heard and decided by court in 2012.   In the  letter, also copied to the Chief Justice, Bart Katureebe, Dr. Ruparelia said they wanted to seek “clarification and guidance” from the Speaker, “whether Parliament can inquire into a matter where a decision of court has been made or where a matter is in court.”  

During  Judicial Review LD CR 16 of 2012, Justice Murangira ruled that “Meera Investments) is the lawful owner of the land comprised in Freehold Register, Volume 1082 Folio 1, Plot 24 Kampala Road,” on 20th of December 2012.

Kadaga is yet to respond.

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Commercial Justice

Lubowa Hospital Construction: ROKO, Finasi Agree to Settle Matter Out of Court

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Parliament early this year approved a loan guarantee of 1.4 trillion shillings to Finasi/ROKO, for the construction of the hospital located in Lubowa, Wakiso district.

Artistic impression of Lubowa International Specialized Hospital

The two construction companies who were selected as a special purpose vehicle have been battling for the construction of an International Modernized Health Facility. As you read this, they have now agreed to settle the case out of court.

The project has faced setbacks with the SPV Finasi/ROKO falling apart following the introduction of another player Power China Guizhou Engineering co as the civil works contractor.

ROKO petitioned court seeking to alter the move by FINASI international FZC chaired by Enrica Pinneti to eject it from the shareholding in the construction of the hospital.

On July, 4th, 2019, Justice Andrew Bashaija issued an interim order to Roko Construction blocking Finasi/Roko Construction from evicting the former from the site in Lubowa where a specialized International Hospital is to be constructed.

Roko Construction through their lawyer Enos Tumusiime argued that they would suffer damages and would be affected should court decline to grant them an injunction.

Justice Bashaija thus granted them the order however, a few weeks later, Roko construction returned to court citing that Finasi Roko and its agents had continued to evict them including removing their properties from the site.

Roko Construction thus demanded that they be paid a fine of 11.8 billion shillings and punitive damages of 22.1 billion shillings as sanctions for contempt of court.

The New Breathe

On Wednesday, the parties told Justice Andrew Bashaija that they are planning to settle the matter out of court.

Justice Bashaija granted them one week to finalize with the mediation and if they fail, they should return to court on September, 4th, 2019.

Media was however not allowed to cover proceedings which were taking place in the Judge’s chambers.

The 264-bed Health care facility if finished, it will be solving most of the complicated diseases that have been forcing Ugandans to go abroad to seek treatment.

It will handle cases of bone marrow transplant, heart diseases, cancer treatment, organ transplant, fertility treatment, highly specialized surgeries, among others.

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Commercial Justice

BAD MONEY AFTER BAD MONEY; BoU risks UGX110 bn in costs; to appeal loss to Sudhir, despite bad case

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The idiom “throwing good money after bad money” refers to spending more money on something problematic that one has already spent money on, in the (presumably futile) hopes of fixing it or recouping one’s original investment.

Unfortunately, this was the decision the Bank of Uganda Governor had to make on Tuesday, August 27th at the behest of Margaret Kasule the central bank’s legal counsel, with help from J.B Byamugisha Advocates, their external lawyers.

At a meeting called by the Governor in his office, on Tuesday, Mutebile was faced with two decisions: accept the ruling, pay the costs and take the smack in the face or appeal the ruling, albeit the flimsy grounds, save face and postpone the costs to a later date, even if they will be higher- after all in either case, it is the taxpayer to bear the costs.

Unfortunately, Mutebile took the latter, thus the hastily made announcement on Twitter, by BoU Director of Communications that BoU would appeal and pursue the matter to its logical conclusion.  

Why do we believe, BoU has a bad case?

On 30th June 2017 Crane Bank Limited [In Receivership] filed Civil Suit No. 493 of 2017 against the Sudhir and Meera Applicants seeking a payment of an equivalent of USD110 million as compensation for breach of fiduciary duty. 

Dr Sudhir Ruparelia has handed down BoU and the various conflicted law firms a legal battle of their lives.

Crane Bank (in receivership) also sued Meera Investments for 48 freehold land titles comprising its former countrywide branch network that it claimed were illegally transferred from Crane Bank to Meera Investments. 

Sudhir, through KAA Advocates applied to court to dismiss the suit saying that Crane Bank (in receivership) has no locus to bring the suit to court, since the Financial Institutions Act (2004) did not permit a receiver to sue or be sued.  Sudhir’s lawyers Kampala Associated Advocates also said that on account of being a foreign owned institution, Crane Bank could not own freehold land and therefore couldn’t sue to own, that which it legally cannot own. 

In his ruling, Hon Justice David Wangutusi, did not mince his words- he said BoU “did not have jurisdiction to file HCCS No. 493 of 2017” and that the orders sought against Meera are “barred in law, rendering” BoU with no “cause of Action” against Meera.

Giving his reasons on why he thought BoU did not have a locus standi, Wangutusi, based his ruling on The Financial Institutions Act which clearly lays out the role of a receiver.

“In my view if it (FIA 2004) had wanted the Receiver who had only 12 months on stage to sue, it would have expressly provided for it. It is not that the Act does not provide for instances of going to Court, having provided for others and left out the Receiver speak loud and clear of the intention of the legislature.

It is not upon Court now to imagine and say “the legislature forgot this we should insert it for them.”          

It is then clear that when the Receiver filed this suit, it was not clothed with   authority. It had no power to do so and Court cannot impute an intention foreign to the legislature.”

“The end result is that once Crane Bank was put under Statutory Management, its Board of Directors was suspended. If there was to be any suit, it would be brought by the Central Bank as the Statutory manager under section 89(2)(e) or by the Liquidator with approval of the Central Bank under section 100(1)(a) of the Financial Institutions Act.

These two were empowered to initiate and defend court action by the Financial Institution Act which interestingly left out the Receiver. The Legislature did not want any court action against the Receiver…… It follows that the Respondent under Receivership lacked locus standi. Without locus standi its attempt at filing a suit was null ab initio (to be treated as invalid from the outset).”   

Following the dismissal, he ruled that “The Bank of Uganda shall bear the costs of the application and the suit”

How much is at stake?

According to several lawyers CEO East Africa talked to in calculating the costs, usually at the High Court Level- usually the judge allows up to about 2% of the decretal amount or amount in dispute. So in this case since the Central Bank was suing Sudhir for an equivalent of $110 million, the least amount that Sudhir would sue for would be USD2.2 million (UGX8.1 billion)- although this can go up to 5% or USD5.5 million (UGX20.3 billion) if the lawyers make a good case.

Given the glaringly bad case, analysts are wondering why BoU’s legal counsel, Margaret Kasule, accepted to have the case go to trial in the first place.

In the case of Meera, it would have to be 2%-5% of the UGX400bn estimated value of the 48 freehold titles in contention, which would come to anywhere between UGX8 billion to UGX20 billion.

In Shilling terms- Sudhir would be entitled to taxed costs amounting up to UGX40.6 billion, before the appeal.

But now that there is a decision to appeal, should BoU lose, they stand to pay up to 10% of the decretal sum- in this case USD11.1 million (UGX41 billion) to Sudhir and UGX40 billion to Meera Investments- altogether in excess of UGX81 billion.  

It could even be more, given that the judges are also allowed discretion. Some lawyers and analysts have put the some to anywhere between UGX81 billion to UGX110 billion.

But maybe Bank of Uganda does not care, at this stage because it is not their money- it is the taxpayer’s money, who incidentally includes Dr. Sudhir Ruparelia, one of the country’s biggest tax payers.  

Moreso, the decision to appeal could be “postponement of embarrassment” given that both the Governor and Deputy Governor’s contracts are about to expire and may not be renewed. An appeal therefore means that the cost and embarrassment of the loss will be in another governor’s regime.

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