By our reporter

1. After declining the buyer brought to take over management of Crane Bank, Bank of Uganda announced on October 20, 2016 that it had placed under statutory management by the regulator of Crane Bank. BoU also appointed Mr Edward Katimbo-Mugwanya, as acting Managing Director, saying he was an experienced banker who had worked with Bank of Uganda and Centenary Bank. This website understands that Bank of Uganda had stopped Crane Bank from major banking functions including lending, at least six months before a run on the bank took place following social media leaks that Crane Bank was due to close.

2. BoU said the reason for taking over the bank was the financial institution was under-capitalised and posed a systemic risk to the banking industry. BoU said the bank had been on its watch list since 2015, after regular onsite visits and external audit reports showed that the financial institution’s capital had fallen below the mandatory 50%.

3. On January 20, 2017, Bank of Uganda “sold” Crane Bank to DFCU for an undisclosed amount which later came to be known as Sh200 billion, payable over a period of years. BoU said after taking inventory of Crane Bank’s value, they realized that its liabilities exceeded its assets and therefore they transferred the bank’s liabilities to DFCU. Mr Emmanuel Mutebile in a January 27, 2017 statement said the central bank had also “conveyed to DFCU, Crane Bank’s assets”. The statement didn’t say the value of assets or liabilities.

4. The owners of Crane bank however say at the last audit of Crane Bank, the assets of the CB exceeded Sh1.3 trillion.

5. In August 2017, six months after taking over Crane Bank, Dfcu revealed that acquisition of Crane bank in January 2017 had made it Uganda’s largest bank by profitability. In its 2017 half year results, dfcu revealed an after-tax profit surge of Shs114 billion, compared to Shs23 billion over the same period in 2016.

6. Crane bank held about Shs1 trillion in depositors’ money at the time Bank of Uganda (BoU) took over the bank late last year, documents now in court show. This information is contained in documents filed by BoU lawyers; MMAKS Advocates and AF Mpanga Advocates in response to a counter claim lodged against the central bank by city businessman Sudhir Ruparelia.

7. Contrary to agreements signed between bank of Uganda and Crane Bank majority shareholder Sudhir Ruparelia to settle the take over outside courts, Bank of Uganda went ahead and sued the businessman, the only Forbes magazine listed billionaire in the country, accusing him of fraud amounting to sh400 billion. After Bank of Uganda bleached the agreement, an emboldened Sudhir challenged the central bank to prove fraud on his part. Details that have emerged since have instead exposed the Bank of Uganda as ill motivated in the bank’s take over.

8. Before the takeover of Crane Bank, Bank of Uganda had assured the over 700 employees that they would not lose their jobs. However, after dfcu took over the bank, they sacked most of the employees in a disputed restructuring exercise and closed some of the branches. The former Crane Employees took their new employer in court for contravening the Employment Act (2006) and sought compensation from the bank. However it emerged in the agreement signed by dfcu and BoU that two months after the acquisition, dfcu was free to do away with unwanted staff.

9. Businessman Sudhir Ruparelia challenged and won a case against BOU lawyers Timothy Masembe Kanyerezi (MMAKS Advocates) and David Mpanga (AF Mpanga/Bowmans) respectively after Justice David Wangutusi, the head of the Commercial court, agreed with Sudhir that the duo were too conflicted to be lawyers in this particular case. In his September application Sudhir argued that the two lawyers should be kicked out because they represented Crane bank until October 20, 2016, when BOU took over its management and thus the law firms shared confidential information with the central bank.

10. Bank of Uganda has faced criticism for secretly signing “a phony sale agreement” with DFCU, a franchise owned by foreign governments including Norway and Netherlands. The agreement does not stipulate how much the bank was worth and it doesn’t say how much the bank was sold.