Tycoon Sudhir Ruparelia has dragged the Commercial Court afresh seeking to dismiss the multibillion case brought against him by his former bank, Crane Bank.
In an application filed on April 30, 2019, Mr Ruparelia contends that when Crane Bank went into receivership, it lost its powers to “sue” and to “be sued”, rendering its suit against him and Meera Investments Company a nullity.
According to Eagle Online, Bank of Uganda (receivership) took-over CBL before it connived with Dfcu to sell it at the a throw away price.
“…I have been advised by…lawyers, which I advise I verily believe to be true, that the respondent has no legal capacity to sue applicants,” reads part of the application.
Mr. Sudhir and Meera Investments also in the application want the recovery, transfer and return of freehold property from CBL in receivership. “…I have been advised by lawyers, Kampala Associated Advocates, which advice I verily believe to be true, that under the Constitution and the Land Act, the Respondent cannot own and hold freehold property and is therefore, not capable of holding the suit property in its names,” the application continues.
Mr. Sudhir also in the application argues that he was sued as a sole shareholder of CBL, which is not true and that the respondent has no powers to commence against CBL shareholders or Sudhir himself.
“The orders sought against the 2nd applicant in HCCS 493 of 2017 are barred by law. The respondent cannot maintain an action against the 2nd applicant for recovery, transfer and return of freehold property when the respondent is a non-citizen within the meaning of the law” reads the suit.
In the application Sudhir wants CBL in receivership to pay National Social Security Fund (NSSF) the statutory debts. CBL in receivership was in the hands of BoU between October 20, 2016 and January 25, 2017 before its assets were controversially transferred to Dfcu bank by BoU.
“The claim by National Social Security Fund could only be made against the respondent,” the application states.
Court has set July 3, 2019 as date to decide whether the plaintiff has no locus standi to commence actions against the applicant in High Court Civil Suit (HCCS) No 493 of 2017 against the applicants.
Bank of Uganda on October 20, 2016 placed Crane Bank under statutory management for being under-capitalised and according to Governor Tumusiime Mutebile, to stem infection of the country’s financial system.
The central bank attributed the under-capitalisation to mismanagement and insider lending, resulting in Crane Bank’s unsustainable non-performing loan portfolio. The bank was later sold to dfcu Bank, although the central bank retained some of its liabilities.
In his affidavit, Mr Ruparelia argues that he was no longer the majority owner of Crane Bank that he founded after Mr Rasik Kantaria, a Kenyan national, on December 6, 2010 snapped up 47 per cent of the bank’s shares. Mr Kantaria later transferred his shares to White Sapphire Ltd, a company incorporated in Mauritius. According to Mr Ruparelia, one Jitendera Sanghani, a British citizen, held 4 per cent stake in Crane Bank.
He also contends that under Uganda’s Constitution and the Land Act, Crane Bank in receivership could not own or hold freehold property and was, therefore, not capable of holding the suit property in its names.
