City Businessman and billionaire Dr Sudhir Ruparelia, has applied to the Commercial Court to dismiss a case brought against him and his real estate firm, Meera Investments Ltd by Bank of Uganda through Crane Bank (in receivership).
In Miscellaneous Application No. 320 of 2019 the businessman wants Civil Suit No. 493 of 2017- Crane Bank (in receivership) vs. Sudhir Ruparelia & Meera Investments Ltd, dismissed arguing that the applicant (Crane Bank) has no locus standi, as a company under receivership cannot sue and be sued.
Locus standi, is a law term used to mean the ability, right or capacity of party to bring an action or to appear in a court and or participate in a case.
In HCCS 493 of 2017, Bank of Uganda through Crane Bank (in receivership) allege that the businessman fraudulently took out up to $92.8m (about Shs334b) and another Shs8.2 billion of depositors’ money from Crane Bank for personal gain through various payments to two construction companies and a technology company.
Some of the companies alleged to have been used by Sudhir for these payments have since vehemently rejected the above claims and produced evidence to discredit BoU’s claims.
Crane Bank also accuses Sudhir of failing to remit more than Shs52 billion in workers’ contributions to the National Social Security Fund (NSSF) and wants him to pay the amount.
It is also alleged that the entire land where Crane Bank had branches, was transferred to Meera Investments Limited, another company owned by Sudhir and subsequently leased the land to Crane Bank. Crane Bank wants the land back.
However the businessman, through his lawyers, Kampala Associated Advocates, in an application to court argues that “H.C.C.S 493 of 2017 is expressly barred by law as the respondent (Crane Bank) has no power to sue or be sued.”
The lawyers also argue that Crane Bank cannot sue for “the recovery, transfer and return of freehold property when the respondent is a non-citizen within the meaning of the law”- since 51% of the bank is owned by non-Ugandans.
The Ugandan Constitution and the Land Act, bars none Ugandans from owning freehold property. The lawyers therefore argue that Crane Bank is not capable of holding the suit property in its names and therefore cannot sue for it.
The lawyers also hold that Crane Bank is not “permitted by law to institute or commence actions against its shareholders and hence the instant suit (H.C.C.S 493 of 2017 ) is barred by law.”
They also want the NSSF claims against Sudhir dismissed arguing that the claim for the National Social Security Fund should have been made against Crane Bank and not its shareholders, as the shareholders were not involved in running the bank.
Sudhir’s lawyers also say, the case brought against the businessman “does not disclose a cause of action against the applicant (Sudhir)” as provided for by Order 6 Rule 29 of the Civil Procedure Regulations.
The businessman, through his lawyers want the entire H.C.C.S 493 of 2017 dismissed with costs.
The case will first be heard on 3rd July 2019.
Shaky BoU Case
This recent application further threatens BoU’s case following a December 2017 dismissal by the Commercial Court of BoU’s lawyers- MMAKS Advocates and Bowmans Uganda from representing Bank of Uganda.
Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) and the Auditor General have also found that the seizure and subsequent sale of Crane Bank and 6 other banks breached several provisions of the Financial Institutions Act (2004) and want the owners of the banks compensated by BoU.