Crane Bank saga: Highlights into Sudhir’s filed defence

By Najib Mulema

Property mogul Sudhir Ruparelia through his lawyers Kampala Associated Advocates on Thursday filed their defence in a case Sudhir and his Meera Investments, are accused of siphoning Shs400 billion from the now defunct Crane Bank.

In this case, Crane Bank (in receivership) is the plaintiff, Sudhir is the defendant number one and Meera Investment is defendant number two.

The defence was filed and received on 3 August, 2017 by High Court of Uganda Commercial Division.

Sudhir and Meera Investment Limited deny every allegation leveled against them by Crane Bank.

Sudhir and Meera Investments contend that Crane Bank is not entitled to any of the allegations and they deny having extracted any sums from Crane Bank.

The property mogul further denies any knowledge of non-remittance of his former employees’ NSSF contributions citing that in case there was any non-remittance of the alleged contribution, it was done without his knowledge.

The defendants further deny any fraudulent transfer of property under their direction stating that Crane Bank is not entitled to any reliefs claimed.

Sudhir and his Meera Investments limited have asked Court to dismiss the case with costs since it was represents an abuse of court process and it was brought in bad faith.

The defendants revealed that they have no intention to sue on the claims set out by Crane Bank and has no cause of action against them.
Sudhir contends that the suit is filed in breach of the advocate –client relationship citing a conflict of interest in the case. M/s MMAKS Advocates are Crane Bank’s lawyers yet previously they also served as Sudhir’s lawyers.

Sudhir alleges that him, Crane Bank and Bank of Uganda entered into a Confidential Settlement and Release Agreement (CSRA) agreeing to settle the case outside court thus refraining from instituting, directing, procuring, instigating , claims, sanctions and demands.
The CSRA was supported by valuable consideration and was entered into freely and willingly between and among parties.

Sudhir contends that all the allegations by Crane Bank and BoU that he extracted $80 million and the so called fraudulent extraction of money through Technology, are based on a document authored by the International audit firm known as Price Water House Coopers (PWC).

He says the document is a draft PWC Report dated 13 November, 2014, which is a whole two years before Crane Bank was placed under receivership.

According to Sudhir, at no time since 13 November, 2014 was he, any member of the Board of Directors of Crane Bank, asked any question concerning the PWC report.

On 14 April 2015, BoU held a meeting with Crane Bank and its external auditors-KPMG for the purpose of approving Crane Bank accounts for the year ended 31 December, 2014but no mention of any allegations in the draft PWC report was made.

Further, following the PWC report dated 14 November, 2014, BoU conducted an onsite inspection and the Director of supervision at BoU Justine Bagyenda held a meeting with Crane Bank board but also did not raise any issues that are alleged in the draft PWC Report .

Sudhir contends that the suit was instant with the main purpose of intimidating, humiliating and blackmailing him and Meera Investments thus stating to court that the suit mounts to an abuse of court process.

The Ruparelia Group chairman listed the reasons that led to the collapse of Crane Bank blaming Bank of Uganda for having let down the fourth largest bank in Uganda with assets in excess of shs1.8 trillion as of October, 2016.

In defence, Sudhir says that the allegation that he solely owned Crane Bank is totally false. He admits that he is a substantial shareholder within the context of s.3 of the financial institution Act which defines a substantial shareholder as a person with more than 5% of the shares.