By Watchdog reporter
Today, October 20, 2016, will go down into history as a day Uganda’s richest man was humiliated.
Sudhir Ruparelia, a businessman renown for living large, always pointed to Crane Bank as a proof of his business acumen. The bank also was a backbone for most of his businesses including hotels, schools and real estate.
Now Bank of Uganda has put Crane Bank under receivership and took over its management which was actually long overdue since reports started leaking that one of the top local banks was in imminent danger.
A couple of days ago, Bank of Uganda also had the audacity to deny reports circulating that the bank was about close and assured the public that the bank was in good shape.
Crane Bank argued that it was in talks with an investor to invest in the bank a deal that fell flat before Bank of Uganda moved to take the bank’s management, but assuring workers that it would keep them on duty.
However, customers with the sixth sense continued to withdraw their money, Governor Tumusime Mutebile said in a statement:
“This is to inform you that Bank of Uganda has, with effect from today 20th 2016, pursuant to Sections 87 (3), 88 (1)(a) & (b) of the Financial Institutions Act 2004, taken over management of Crane Bank Ltd. You are accordingly suspended from your position as Acting Managing Director and you are required to make a formal handover of your responsibilities to the Bank of Uganda Statutory Manager, Mr Edward Katimbo Mugwanya,” read part of the statement signed by Bank of Uganda governor Emmanuel Mutebile.
Crane Bank has been on the Bank of Uganda’s watch list since September 2015 after regular onsite tests and external audit report which showed the bank’s capital had fallen below the 50% legal requirement under the law.
However analysts say Crane Bank was too big to fall, and the takeover of the bank indicated that there is more trouble brewing in Sudhir’s backyard.