Sudhir wins first round as BoU drops MMAKS and AF Mpanga Advocates from mediation team - Daily Post Uganda

Sudhir wins first round as BoU drops MMAKS and AF Mpanga Advocates from mediation team

Lawyers of MMKS Advocates and AF Mpanga Advocates have been dealt a blow with the latest news showing the two Kampala law firms are unlikely to represent Bank of Uganda. Crane Bank lodged in Commercial Court months ago against tycoon Sudhir Ruparelia and Meera Investments for allegedly committing a fraud of Shs400 billion from the bank.

Ruparelia lodged a case against the lawyers from the two firms to represent Bank of Uganda, arguing that they had at one time served as his principal advocates and as such present conflict of interest in the Shs400 billion case where Bank of Uganda has big stakes. Bank of Uganda wants Ruparelia and his Meera Investments pay Shs400 billion which they allegedly swindled from Crane Bank.

However credible sources have told Daily Post that the Principle Judge Yorakamu Bamwine who is mediator in the case advised Bank of Uganda to appoint new lawyers after City tycoon Sudhir Ruparelia and his team threatened to walk away from mediation as advised by the head of Commercial Court judge, David Wangutusi to opt for an out-of-court settlement.

The Central Bank, sources say, has agreed officials to hire new lawyers after the meeting with Judge Bamwine, the mediator. Sebalu, Lule & Co. Advocates are now likely to represent Bank of Uganda in the Crane Bank case for mediation purposes.

According to sources, Bamwine wants mediation to be given chance as the case involves huge sums of money in billions of shillings. Mediation would help the two parties settle for an ‘out- of -court settlement.

Mr Ruparelia had rejected mediation talks involving the two law firms he accuses of conflict of interest, having worked for him in the past on many assignments. Mr Sudhir insists MMAKS and AF Mpanga were his witnesses in the main case.

In his application now before court, Mr Ruparelia states that David Mpanga of AF Mpanga Advocates and Mr Timothy Kanyerezi Masembe of MMAKS Associates, are witnesses in his defence and therefore are not qualified to represent Crane Bank (liquidated), which has sued him.

He contends that if the two law firms are allowed to handle the case, it will be breach of trust since they are already privy to information that can prejudice the trial.
Mr Ruparelia has since told court that the two law firms carried out legal analysis for PriceWaterHouse Coopers which was contracted by Bank of Uganda to conduct an independent audit of Crane Bank.

Mr Ruparelia’s countersuit accuses Bank of Uganda lawyers (MMAKS Advocates and AF Mpanga Advocates) of conflict of interest and faults Bank of Uganda for breach of Confidential Settlement and Release Agreement (CSRA).

In the run up to the Crane Bank saga, it emerged that Mr Ruparelia and BoU authorities under Clause 7 of the CSRA had agreed not to sue each other. Mr Ruparelia now wants a refund of $8m (Shs28.7m) and the titles on land in Industrial Area and Parliament Avenue.

Mr Ruparelia says some of the lawyers in the aforementioned law firms such as Timothy Masembe Kanyerezi represented him before and David Mpanga are potential witness in this case since his law firm participated in the coming up of PWC report that implicated him in the alleged fraud and that because of that, he should instead be a witnesses and not a lawyer on the opposite side.

Although in a joint defence, MMAKS Advocates and AF Mpanga Advocates disowned Mr Ruparelia in a September 11 rejoinder attached invoices from Mr Masembe to Meera Investments and receipts from MMARKS for the payment of professional fees and stamp duty.

“Any attempt to use the knowledge they obtained to my prejudice as a result of the instructions they received is manifest breach of MMAKS Advocates’ fiduciary obligations.
Mr Sembatya by purporting to reveal the extent of his instructions, moreover falsely, in order to prejudice me and even expand the allegations in the plaint is a clear violation and betrayal of my more than 12-year trust in MMAKS Advocates,” Mr Ruparelia’s defence reads in part.

Although BoU accepted to hire new lawyers, lawyers Mpanga and Kanyerezi, aver that Crane Bank, now in receivership, and Mr Ruparelia are two separate entities and representing the former cannot imply they represented the latter even when he was a shareholder in the defunct bank.

The two law firms separately swore affidavits in defence of their instructions by Bank of Uganda to defend Crane Bank in the case.

On October 25, 2016 Bank of Uganda took over Crane Bank and suspended all members of its board, saying the then biggest indigenous bank was incurably drained financially and posed a systemic risk to the country’s banking sector.

The central bank later sold Crane Bank to Dfcu Bank in January this year.

On July 13, Bank of Uganda lodged a case against Mr Ruparelia and Meera Investments, seeking to recover about Shs400 billion that Mr Sudhir allegedly extracted from Crane Bank. It is also seeking to recover freehold land titles for the Crane Bank branches, general damages and costs of the suit.

Mr Ruparelia has denied any wrongdoing in a Shs397b case in the Commercial Court. He also denied responsibility for the collapse of the bank which was taken over by Bank of Uganda (BoU) and liquidated to DFCU Bank in October last year.

Mr Ruparelia blames the problems of the Crane Bank on the weak economy and said at the hearing of the case he will adduce evidence to prove he did not defraud Crane Bank of the alleged money for his personal gain.

Mr Ruparelia contends that he did not commit any frauds as alleged by Bank of Uganda and has said he will show the plaintiff (Bank of Uganda)to strict proof. Mr Ruparelia says he is not liable to refund or account for any monies as alleged by the plaintiff (Bank of Uganda).

Court has set December 21 to determine whether lawyers from MMAKS Advocates and AF Mpanga Advocates are legible to prosecute the case against Ruparelia over closure of his Crane Bank. Vincent Mugabo, the registrar in the Commercial Division of the High Court, on December 12 issued a notice for the ruling on the preliminary matter raised by Ruparelia.

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