Sudhir lawyers file defence in Crane Bank case, trashing PwC’s “alleged” forensic report

Tycoon Sudhir Ruparelia.

Kampala Associated Advocates, the law firm representing tycoon Sudhir Ruparelia in the landmark case where is pitted against Bank of Uganda on Thursday afternoon filed their defence, punching holes into the PricewaterhouseCoopers forensic report on Crane Bank that BoU used as a basis to file a case against the businessman.

BoU through their lawyers MMAKS Advocates and AF Mpanga Advocates filed a suit against former Crane Bank proprietor Sudhir on behalf of Crane Bank (in receivership) seeking that he pays back close to Shs400bn for allegedly having “siphoned” money out of the defunct bank.

Sudhir’s lawyers filed a 64 page defence this afternoon that casts the forensic audit document as a cooked up one.

“Sometime in January 2017, Ist defendant (Sudhir) through his representatives Mr. Kakembo Katende and Mr. Azim Tharani attended a meeting at the offices of MMAKS Advocates together with Mr. Masembe Kanyerezi and Mr. David Mpanga. The purpose of this meeting was to share an alleged PWC forensic report indicating the alleged extraction of US$80 million,” the lawyers wrote in their defence.

“At the said meeting, Mr. Masembe and Mr. Mpanga declined to share the PWC forensic report but instead rang the PWC “auditor” who allegedly made that allegation, put him on speaker phone and allowed only a few questions,” reads the document Matooke Republic has accessed. 

“The Auditor confirmed on speaker-phone that the US$80 Million did not leave the Plaintiff in this alleged transaction,” the defence lawyers note.

“The Plaint contains excerpts of the report and from these excerpts the 1st Defendant (Sudhir) has been able to establish that the alleged forensic report is actually a draft document created by PWC on 13th November 2014.

In their defence, Sudhir’s lawyers also indicate that he cannot be held responsible for actions of his employees, in case of wrongdoing on their part.

“The first defendant shall contend that the said Mr. Vivek Sharma and Mr. Rakesh Gupta, if at all they entered any wrong entries, did it without his knowledge, consent or approval.”

Sudhir’s lawyers also argue that as a shareholder who wasn’t involved in the day to day running of the bank, he relied on reports of audit firms that had been prequalified and approved by the BOU.

“The Ist defendant shall at the earliest opportunity seek a Third Party Notice against PwC, KPMG AND Deloitte to indemnify him from any misstatements in the audited financial reports.”

The forensic report also alleges that US$9.27M was extracted from Crane Bank through Technology Associates but Sudhir’s defence indicates that US$5.9M (for Crane Bank Uganda) and US$1.3M (for Crane Bank Rwanda) was paid to Technology Associates to provide T24  software from Temenos following a Bank of Uganda, May 2013, on-site examination report that required Crane Bank to upgrade its core banking software before 31st December 2013.

The defence lawyers also indicate that Sudhir has never been a shareholder or Director in Technology Associates or any of its companies or subsidies as alleged in the report. 

On amounts allegedly due to NSSF

Sudhir’s lawyers indicate that he was not responsible for preparation and maintenance of Crane Bank’s 700-plus staff payroll as it was a responsibility of the bank’s management. They add that NSSF audited the bank on diverse occasions.

“The 1st defendant (Sudhir) is not aware of any query that was ever raised and in any event he is not liable for any under declarations.”

The case comes up for hearing soon and is bound to be one of the landmark cases in Uganda’s commercial litigation history.