Probably the longest litigation battle in Uganda’s financial sector has come to an end after five years with Bank of Uganda, the regulator of the financial sector, coming out of it bruised, hurt and shamed for not knowing how to do its job.

As the public expected, the Supreme Court on Friday dismissed, with costs to the respondents, an appeal by Bank of Uganda against businessman Dr. Sudhir Ruparelia and Meera Investments, the real estate arm of the Ruparelia Group.

The highest ranking court in the country ordered Bank of Uganda directly pay costs at all court levels, right from the Commercial Division of the High Court. The court also directed that the management of Crane Bank be reverted to its shareholders.

The Supreme Court ruling effectively settles a long-standing legal battle between Sudhir Ruparelia and the central bank, dating back to 2017 when the regulator erroneously took over the management of Sudhir’s Crane Bank and eventually sold it to DFCU Bank.

According to the ruling, Sudhir Ruparelia will not pay the Shs397b that Bank of Uganda had wanted him to pay. This ruling excited Sudhir Ruparelia who over the period of the litigation maintained the Bank of Uganda has stolen his bank.

Crane Bank Limited (in receivership) had sued Sudhir and Meera Investments Limited in the High Court Commercial Division. The bank had sought recovery of money, allegedly misappropriated by Sudhir Ruparelia as a director and shareholder.

The latest ruling was on an application to withdraw an appeal and the party that was supposed to meet the costs of the withdraw of the appeal.

Meera Investments Limited, a company owned by businessman Sudhir Ruparelia, has emerged as the best bidder and now becomes the owner of Simbamanyo House, the building that accommodates Ministry of Gender, Labour and Social Development.

The building, located at Plot 2 Lumumba Avenue, was auctioned by Equity Bank Uganda in an effort to recoup an unpaid loan amounting to about $8.1m from Simbamanyo Estates.

In a letter to tenants, Equity Bank announced the takeover and asked them to corporate with Meera Investment, the new landlord.

“We are writing to inform you that Equity Bank Uganda Limited, as mortgage, has completed the sale of the above-mentioned property, after a public auction concluded on October 8, 2020, to the best evaluated bidder M/s Meera Investments Limited.

“The new owners will be getting in touch with all tenants individually to work out the modalities for their ownership transition. We trust you will accord the new owners all courtesy and all future rental payments and other tenant inquiries and obligation will be handled by Meer Investments Ltd or their agents," Equity Bank said in a notice.

Sam Kirubi, the managing director of Equity Bank, who signed of the notice, said that all the tenants were put on notice about the auctioning of the property in an advert placed in Daily Monitor newspaper on September 8.

Meera Investments Limited was also immediately after the sale registered on the title of Plot 2 Lumumba Avenue. Johnson Bigiira, the senior registrar of titles in Ministry of Lands said Meera Investments Limited was registered on the title under Instrument Number KCCA 00074649.

Sudhir said that Meera Investment participated in the competitive bidding and his $5m was displayed as the best evaluated bid.

“Meera Investments Limited were the highest bidder for the auction from Equity Bank and acquired the property by the pay of $5m. We are ready to meet our new tenants and promise to cooperate with them,” Sudhir said.

Simbamanyo Estates is embroiled in a property dispute with Equity Bank Uganda and Equity Bank Kenya resulting from unpaid loans.

Documents in the Commercial Division of the High Court show that on August 20, 2012, Equity Bank entered into a financial transaction agreement that would lead the financial institution to release $6m to Simbamanyo Estates.

The two banks, details indicate, pooled money together to advance the facility with at least $3.5m drawn from Equity Bank Kenya and $2.5m from Equity Bank Uganda.

Simbamanyo Estates which acquired the loan to finance the construction of Afrique Suites Hotel in Mutungo failed to meet its loan obligation leading to the situation at hand.

The total outstanding including interest and operational fees, among others, court documents show, would come to at least $8.10m.

Fred Muwema, the lawyer representing Simbamnayo Estate in this matter, said the matter is still in court and that there is caveat already on the property forbidding transfer until the case is heard and resolved.

“The battle is not over and as we speak, we are in possession of the property, I don’t understand why the bank is in the hurry. This has happened before and we took it away from them. The bank should wait until the final decision on this matter is made.” Muwema said.

Businessman Dr. Sudhir Ruparelia has won a case in the Court of Appeal in which Bank of Uganda (BoU) contested the ruling of the lower court.

The court upheld the judgment of Commercial Court in an application filed by BoU seeking a refund of UGX 397 billion from Sudhir which he allegedly pulled out from Crane Bank.

“The person (petitioner) should pay cost and that is non other than Bank of Uganda because Margret Kasule filed on behalf of Bank of Uganda. They knew Crane Bank was in receivership as it wasn’t in existence but they went ahead to sue it” read the judgement.

Justice David Wangutusi of Commercial Court in August 2019 this week dismissed a case in which BoU claimed that Ruparelia and his Meera Investments Ltd fleeced his own Crane Bank Ltd (now in receivership) of UGX397 billion.

In his 22-page ruling that was delivered by the court’s deputy registrar, Mr Festo Nsenga, Justice Wangutusi noted that at the time BoU and Crane Bank (in receivership) filed the suit against Mr Ruparelia and his Meera Investments in January 2017, Crane Bank was a non-existing entity, having been terminated when the Central Bank sold its assets to DFCU Bank in October 2016.

The judge ruled that this rendered Crane Bank in receivership incapable of suing or being sued since there would be no assets to be claimed for.

Court noted that the public notice made it clear that BoU as the receiver had done an evaluation of the respondent (Crane Bank in receivership) and arranged for the purchase of its assets and assumption of its liabilities by another financial institution.

“In his [BoU] notice, he specifically stated that the liabilities of the respondent had been transferred to DFCU Bank Ltd and that because DFCU Bank had taken over the liabilities, it would, by way of consideration, be paid by conveying to it the respondent’s assets,” the judge ruled.

Bank of Uganda, through their new attorney Dr. Joseph Byamugisha of Byamugisha & Co Ltd the chose to file an appeal.

SSOURCE: PMLDaily

Kampala Parents School recently announced it will start delivering lessons online using the Zoom Application and true to its word, the Ruparelia Group-owned school Tuesday commenced the exercise.

The first beneficiaries of the exercise were the P5, P6 and P7 classes. Classes for Primary Three and Four will start on 29th May 2020; Top Class, Primary One and Two will start on 4th June 2020.

In an interview with CEO East Africa, Kampala Parents School proprietor Dr. Sudhir Ruparelia said that the school had procured 40 internet-connected computers. He said teachers had been trained to use the computers.

“Kampala Parents has always been a proud leader in innovating for our parents and learners. It is difficult to predict when Covid-19 restrictions will end, yet our children must continue being fed with knowledge,” he said.

Dr. Ruparelia said that parents will not incur any extra fees beyond the normal tuition structure. “Learners who had completed their term 1 fees will continue and finish the syllabus at no cost,”

“We also urge those who had not completed doing so, so that the learners may catch up,” he said adding that, beginning on the June 09th the school would open for online Term 2 online lessons, subject to the guidance by the Ministry of Education for learners in Primary Seven.

Because of the COVID19 pandemic, President Yoweri Museveni in March closed all school and learning institutions and have remained shut with no sure date of their reopening. This has meant that students and pupils are not learning.