By our reporter
A few weeks back an agreement between Bank of Uganda and Dfcu Bank leaked and it indicated unbelievable irregularities which were orchestrated by most senior Central Bank bosses.
The agreement which excluded shareholders of Crane Bank contrary to the Financial Institutions Act exposed the intent to defraud in connivance with Dfcu bosses.
Crane Bank was owned by Sudhir Ruparelia (28.83%), Ms Jyotsna Ruparelia (13.8%), their children Ms Sheena Ruparelia, Ms Meera Ruparelia and Mr Rajiv Ruparelia (1.99%), White Sapphire (47%), Jitendra Sanghani (4%) and Kampala businessman, Tom Mugenga (0.003%).
However, on January 25, 2017, four people sat down and agreed to sell and buy Crane bank without giving any information to Create Bank shareholders, even up to now.
Since all of them knew what they were doing was illegal, they even signed an agreement where they all swore to keep secret the transaction as long as they lived.
At the centre of the fraud was Mr Emmanuel Tumusiime Mutebile himself the governor of the Bank of Uganda; Margaret Kasule, BoU’s executive secretary; Juma Kisaame, the managing director of dfcu Bank and William Sekabembe the executive director.
In the Agreement document titled, “Purchase of assets and assumption of liabilities agreement” two Bank of Uganda officials even promised dfcu Bank protection from any claims by anyone after the illegal sale of the bank with assets valued in the excess of Sh1.3 trillion.
Dfcu last year bragged in a report to its shareholders that it got the assets of Crane Bank at a giveaway price. Indeed, the agreement shows that Dfcu got a bank with assets valued at Sh1.3 trillion for just Sh200 billion. To prove to its shareholders that this was a fat deal, Dfcu reported after three months of taking over the assets of Crane bank that its profits had jumped from Sh31 billion to Sh150 billion.
Also, Crane Bank shareholders contend they were cheated when Dfcu fraudulently and in connivance with Bank of Uganda officials took over a Shs600 billion bad loans portfolio for no payment at all.
BoU classified the loans as non-performing, had Crane Bank shareholders pay for them to the tune of Shs350 billion and then they were secretly transferred to Dfcu.
“By this arrangement, these non-performing loans were no longer property of CBL, but belonged to the shareholders who had paid for them with their capital contributions,” the shareholders argue.
Meanwhile, the legal advisors of BoU in the sale transaction with Dfcu immediately became legal advisors of Dfcu and began to make collections for Dfcu on the same assets and portfolio they had transferred to it, which smirks of conflict of interest!
The lawyers David Mpanga of AF Mpanga Advocates (Bowmans) and Timothy Masembe of MMAKS Advocates have been replaced by BoU after court ruled that they were conflicted in representing the Central Bank against Crane Bank shareholder Sudhir Ruparelia because they were his lawyers who had represented him for a decade.
What is mind blowing is how Dfcu, a financial institution with majority shares owned by foreign governments and firms could have been involved in a hasty takeover of Crane Bank, under looking several legal loopholes that led to the sale being deemed as fraudulent.
Dfcu (a financial institution in Uganda) is partly owned by the Commonwealth Development Corporation (CDC) a British government-owned company, together with other foreign firms like Rabo Development from the Netherlands and NorFinance from Norway who are shareholders in Arise B.V together with Norfund, a Norwegian government owned Private Equity firm and FMO, the Dutch Development Bank.
Among shareholders are staff members of Bank of Uganda under their retirement savings scheme.
Below is the list of shareholders:
1 Arise BV 58.71%
2 CDC Group of the United Kingdom 9.97%
3 National Social Security Fund (Uganda) 7.69%
4 Kimberlite Frontier Africa Naster Fund 6.15%
5 Two undisclosed Institutional Investors 3.22 %
6 SSB-Conrad N. Hilton Foundation 0.98%
7 Vanderbilt University 0.87%
8 Blakeney Management 0.63%
9 Bank of Uganda Staff Retirement Benefits Scheme 0.59%
10 Retail investors 11.19%