DFCU Admits buying Sudhir’s Crane Bank Via ‘Watsapp’

The same way city Tycoon Sudhir Ruparelia confessed before the committee on commission’s statutory authorities and state enterprises (COSASE) that he was forced to buy Amama Mbabazi National Bank of Commerce (NBC) assets through a phone call, DFCU Group has also unmasked the related chapter.

Speaking while appearing before the members of COSASE at Parliament on Friday, the former CEO of DFCU bank Juma Kisami said that the former executive director bank supervision at bank of Uganda Justine Bagyenda contacted them on phone to buy crane bank.

Kisima noted that Bagyenda contacted him on phone before he was informed him of a potential bank that they would acquire.

This came just a day after the Vice Chairperson of the defunct Crane Bank, Dr. Sudhir Ruparelia had demanded that the Central Bank should return the closed bank’s bad loan book which he said is valued at Shs570 billion.

Bank of Uganda (BoU) closed Crane bank in November 2016 and sold it to DFCU on grounds that it was undercapitalized. 

Sudhir said that the impression from BoU that DFCU bank paid for the bad loan book at Shs200 billion was  false.

“BoU is holding our bad loan book illegally, they need to return it to us,” said Sudhir, who, together with other Crane Bank shareholders was appearing before the committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on 06 February, 2019.

He also demanded that BoU returns US$ 23.5 million that was raised by Crane Bank shareholders.

“BoU has no basis to keep that money,” said Sudhir.

Sudhir further asked for a market valuation of assets and liabilities sold to DFCU as well as a valuation of the goodwill that DFCU benefited from taking over Crane bank’s branches.

The Crane Bank Chairperson, Joseph Briribonwa accused BoU of premeditating the closure and sale of Crane Bank. He said that whilst the bank was faced with a liquidity crisis that was caused by the economic downturn in 2014/2015, shareholders raised capital amounting to US$ 8 million which funds were with-held by BoU.

“BoU frustrated all the efforts of Crane Bank to sort out its liquidity crisis and instead sold it to the preferred bank,” said Biribonwa. 

Biribonwa added that BoU rejected Crane Bank’s loan application and later on gave an interest free loan to DFCU.

“BoU never had a plan to revive Crane Bank and made a decision to sell the bank. BoU handled the take over of Crane Bank in an illegal manner,” said Biribonwa.

Meanwhile, Crane Bank shareholders told COSASE that they were forced to take over assets of National Bank of Commerce (NBC), which was closed in September 2012 on grounds that its activities were detrimental to the interests of depositors.

Former Crane Bank lawyer, Alex Rezida said that he received a telephone call from the former Executive Director, Supervision in BoU, Justine Bagyenda with instructions to take over NBC.

“Crane Bank was given only three days to integrate the NBC deposits into their system,” said Rezida.

When asked by MPs why Crane Bank directors did not question the directive, Rezida said they were not in position to oppose directives from Senior BoU officials who were answerable to no one.

However DFCU executive director William Sekabembe has dismissed allegations that they did not wait for the statutory manager Katimbo Mugwanya to hand over crane bank.

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