Dr.Sudhir strips BOU in Illegal closure of Crane Bank; COSASE left in shock!

By Timothy Sibasi & Nasser Kasozi
City mogul and proprietor of liquidated and closed bank Crane Bank, Sudhir Ruparelia has unpacked shocking and irritating revelations into the unlawful closure of his bank, Crane Bank in 2016 that caused an astronomical over $30 million and crumble of his Shs1.8 trillion banking empire.
Sudhir had appeared before the COSASE probe committee of parliament as a legitimate witness in the pondering BoU probe on the closure of 7 private financial institutions under unclear circumstances.
In submission dully signed by phillothrompist Sudhir and the Ruparelia Group of Companies chairman, Board of Directors, Joseph Biribonwa, BoU took over Crane Bank on 20 of October 2016 at midnight in a manner that was “illegal, unfair and unprofessional.”
Biribonwa told the committee that indeed around 2014-2015, there was a downturn in the economy which affected the Central Bank Rate (CBR) and led to an increase in interest rates by commercial banks which forced a number of customers to default their loan obligations. This crisis, allegedly, resulted in Crane Bank’s capital inadequacy prompting BoU to hastily take over and sell the Bank to Dfcu without exploring other options as stipulated by the Financial Institutions Act.
In his report, Biribonwa faulted BoU for frustrating Crane Bank’s efforts to recapitalize including their efforts to bring strategic investors and borrow a loan from the Central Bank for recapitalization.
“BoU did not support but actively frustrated the efforts of Crane Bank shareholders to bring strategic investors.
The Central Bank instead opted for a sale of assets and liabilities of Crane Bank. Buyers were invited to bid on 12 December 2016 and bids were closed on 20th December 2016,” Biribonwa said adding that BoU deliberately frustrated other bidders and preferentially selected Dfcu Bank as the buyer.
Whereas BoU Governor Emmanuel Mutebile insists that the bidders were given inventory report, Biribonwa says that the inventory was prepared after the bidding had been closed.
“This is illogical since the inventory report was dated 21 December 2016, a day after the bidding was closed. No serious buyer can commit to buying a bank of assets worth Shs1.8trillion in a space of seven days. This was a deliberate elimination of the other bidders,” Biribonwa said.
It should be noted that the Auditor General in his report noted that BoU did not value the assets of the Bank but instead relied on the Dfcu’s evaluation report before they eventually sold Crane Bank to them at Shs200bn.

City mogul and proprietor of liquidated and closed bank Crane Bank, Sudhir Ruparelia in white while appearing before COSASE Probe committee at Parliament.

The Central Bank also reportedly ignored the report from a private audit-PriceWaterCoopers (PWC).
“It is illogical and inconceivable that a person selling an asset can rely on the inventory done by the buyer to settle on the terms of an agreement especially after eliminating other bidders unfairly,” he said.
“It is clear that BoU mishandled the issues of Crane Bank and were in violation and in complete disregard of the Provisions of the FIA. BoU disregarded the interests of the employees, shareholders, customers and the economy,” Biribonwa said.
In his remarks to the committee, Sudhir sought that BoU returns the bad book that was handed over to Dfcu that is valued at Shs570bn.
Sudhir also wants BoU to return all the money that they [shareholders] advanced to CBL as shareholder loans. Sudhir said that prior to taking over the shareholders lent CBL $8m and after the take over the shareholders remitted $15.5m to BoU bringing the total to $23.5m.
“We want a market valuation to be conducted of the assets and liabilities that were sold to Dfcu because to date, no one knows the list and values of the assets and liabilities sold to Dfcu.

City mogul and proprietor of liquidated and closed bank Crane Bank, Sudhir Ruparelia in white while appearing before COSACE Probe committee at Parliament.

Any excess value to the assets should be returned to CBL,” Sudhir said.
Sudhir added that at the time of the takeover, Dfcu got 46 branches, became the 3 largest bank overnight and also got deposits worth Shs1.3trillion including 600,000 active accounts.
The former Crane Bank boss also revealed that Dfcu assets increased by 67% after taking over Crane Bank having risen from the worth of Shs1.8trn to Shs3trn.
“As shareholders, we want accountability for the money that BoU claims to have injected into CBL. We also want the receivership to be terminated and the company (Crane Bank) should be returned to its shareholders,” Sudhir said

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