KAMPALA: Bank of Uganda Governor Prof. Emmanuel Tumusiime Mutebile has rubbished claims by Dfcu bank that they have to be compensated Shs47Bn as a result of losing interest in purchasing tycoon Sudhir Ruparelia’s properties, which former Crane Bank Limited (CBL) was leasing from Meera Investments Limited.
Daily Post Uganda revealed here recently how Dfcu bank bosses had hatched a plot to demand Shs47Bn from BoU after losing interest in the Meera Investment Limited properties.
It should be noted that when Dfcu expressed interest in purchasing the properties, it paid Shs10Bn to BoU for the Meera Investments Properties, in which it set up branches around the country.
However, now the same Dfcu bank is demanding Shs47Bn as compensation from BoU for being evicted from Meera Investments Ltd Properties, which they were illegally occupying.
But our source at BoU reveals that Dfcu bank officials have failed to show cause and reason why they demand the Shs47Bn, yet it is not BoU that erroneously advised them to take over the properties, because they did so on ill advice of their lawyers of Sebalu and Lule Advocates.
In addition, BoU never valued any properties which they had gotten from Meera Investment during and after the closure of Crane Bank Limited; it’s Dfcu that did the valuing.
It later emerged that Dfcu were lured into the Crane bank deal by conflicted city law firms of MMAKS and Bowmans and Mpanga Advocates on one side and on other side BoU Deputy Governor Dr. Louis Kasekende and Justine Bagyenda, who misled them into buying Meera Investments at Shs10Bn without any proper property valuation by BoU.
It is shocking that now Dfcu Bank wants BoU to pay them Shs47Bn as a result of their decision to exit properties and they are basing that claim on the Purchase of Assets and Assumption of Liabilities Agreement signed between the bank and BoU on January 25, 2017.
The valuation of Meera investment properties was Shs47Bn at the time when Dfcu bank took over CBL. Dfcu bank paid BoU only Shs10Bn for the properties and has been occupying them for almost three years without paying rent, leading Meera Investments Limited to sue them, yet they now demand Shs47 as compensation, which doesn’t make business sense at all for the taxpayers.
This scenario exposes the fact that Dfcu Bank under declared the value of the properties when they valued them, hence paying BoU just Shs10Bn, instead of Shs47Bn, which they now want.
In addition, Dfcu Bank should have paid more in stamp duty based on the value of the properties, which amounts to fraud, tax evasion and criminality.
Dfcu bank is demanding for the money after realising BoU is unlikely to recover the actual property value as sighted in the agreement.
Reports indicate that Mutebile is not willing to meet Dfcu Bank officials to discuss the matter further, since Dfcu has already transferred the 48 lease titles of former Crane Bank Limited back to BoU.
Genesis Of The whole Conundrum:
Trouble for Dfcu bank started in August this year after it emerged that the bank had been misled by their lawyers of Sebalu & Lule Advocates to illegally transfer title properties from names of Meera Investments Ltd into Dfcu Bank, a move that was letter trashed by court as illegal, null and void.
Sebalu & Lule Advocates have since been barred by court from representing Dfcu bank against Sudhir because of conflict of interest.
Following the court ruling in late August 2019 that Crane Bank (In Receivership) had no right to sue Meera Investments and Sudhir Ruparelia for Shs379Bn allegedly swindled, Dfcu bank Limited in a letter dated September 12, 2019 informed BoU of its decision to exercise its decision to rescind its interest in purchasing the 48 properties pursuant to clause 8.7 of the Agreement.
As part of the rescinding of the purchase, Dfcu was compelled to return to BoU certificates of title for Meera Investments Limited but is yet to compensate Meera Investments for illegally occupying their properties since 2017 and the legal costs they incurred in the battle to reclaim the properties.
Dfcu bank acquired some assets of CBL at Shs200 billion, paid in installments, without any interest on top.
Some analysts have argued that BoU dished out former CBL assets to Dfcu bank for free, yet the same bank now demands Shs47Bn for property they had illegally taken over.
Dfcu’s Crane Bank take-over made it to become the second largest commercial bank in the country, with an asset base of Shs3.37 trillion, just behind the market leader Stanbic Bank which boasted of Shs3.73 trillion in assets then. It also at the same time saw an increase in the branch network from 45 to 66 branches countrywide.
But Dfcu bank is currently undertaking measures to relocate all these branches and last month they called for bids from companies that can help them in this endeavour.