The Governor Bank of Uganda (BoU), Prof. Emmanuel Tumusiime-Mutebile, has revealed that BoU will challenge the Court of Appeal’s dismissal of the case filed by Crane Bank Limited (in Receivership) against businessman, Sudhir Ruparelia and Meera Investment Limited in the Supreme Court.
On June 23, a panel of three Justices at Court of Appeal, Nakasero, including the current acting Chief Justice, Alfonse Owinyi Dollo, Justice Cheborion Barishaki and Justice Steven Musota, unanimously dismissed with costs a civil suit where Bank of Uganda had sought to recover Shs 397 billion from businessman Sudhir Ruparelia and his Meera Investments company, allegedly “illegally extracted” from the defunct Crane Bank Limited (CBL).
The Judges unanimously ruled in favour of Ruparelia and Meera Investments upholding an earlier High Court ruling that being in receivership, Crane Bank had no capacity to institute legal proceedings.
The High Court had ruled that since Section 96 of the Financial Institutions Act insulates institutions under receivership against being sued, they also have no legal right to sue.
Consequently, the appellant court dismissed the case with costs.
However, in a statement to the media, the Governor Bank of Uganda contends that receivership does not take away the legal personality of a company, including the right to trace and recover assets and the right to sue for those assets.
The Central Bank differs with the two judgements on grounds that they render the principle of tracing and preserving assets of an insolvent bank during statutory arrangements and receivership futile.
“The judgements also set a precedent that limits the Central Bank’s capacity to resolve banks in a manner that ensures accountability for mismanagement of depositor funds and promotes good corporate governance in the banking industry,” Mutebile noted.
The Governor vowed to take the fight to the Supreme Court in addition to pursuing other legal recovery options.
“BoU wishes to reassure the public that it’s committed to pursuing this matter to its logical conclusion,” Mutebile affirmed.