Sudhir now wants BoU lawyers as witnesses

Tycoon Sudhir Ruparelia.

The legal battle between Sudhir Ruparelia and Bank of Uganda has taken a new twist following the tycoon signing an affidavit, indicating that AF Mpanga Advocates and MMAKS advocates the firms that are representing Bank of Uganda and their lawyers David Mpanga and Timothy Masembe Kanyerezi should instead be witnesses. Sudhir also points out that the pair should be pleading his case because they are and have been “his” lawyers for over a decade.

In his 11-page affidavit sworn at the Commercial court in response to a Shs400bn Bank of Uganda lawsuit against him, Sudhir on counsel of his lawyers Kampala Associated Advocates contends the two cannot represent BoU in this case.

“MMAKS Advocates and AF Mpanga Advocates cannot appear as counsel in a matter in which they have potential to be witnesses and are conflicted, and they cannot appear against former and current clients, or in matters where they will be in breach of their fiduciary relationship,” Sudhir notes.

BoU procured the services of the two law firms to represent the central bank in the Crane Bank case against Sudhir but the business magnate argues they are in essence his lawyers owing to past dealings and representing BoU constitutes conflict of interest.  

Crane Bank where Sudhir was a shareholder went into receivership in October 2016 over undercapitalisation. Sudhir blamed the bank’s woes on non-performing loans but the BoU suit claims he “siphoned” money out of the bank.

 “MMAKS Advocates were Crane Bank’s lawyers until the date of its take-over by Bank of Uganda on 20th October, 2016. During the management and conduct of the affairs of Crane Bank, the executive directors regularly consulted and wholly relied upon the advice of MMAKS Advocates and in that consultation, the Board and the management shared facts which are in issue in the case,” Sudhir argues.

Sudhir reveals that MMAKS advised the board and management on a daily basis since 2005.

“During the course of this intense advocate-client relationship, the board shared with MMAKS Advocates all matters pertaining to the management, shareholding and business of Crane Bank,” said Sudhir.

The businessman says during this time, “we as board members believed that MMAKS Advocates as our advisors were in fiduciary relationship with us and had an ethical duty of fidelity, loyalty and confidentiality and by accepting and prosecuting instructions of Bank of Uganda, MMAKS Advocates is in breach of its fiduciary obligations to me.”

Sudhir now wants court to direct that the lawyers be listed as his witnesses in the case.

MMAKS lawyer Timothy Masembe Kanyerezi.

On David Mpanga, Sudhir cited a case filed in the Constitutional Court by the former shareholders of the National Bank of Commerce where the Mpanga served as Crane Bank’s lawyer and “became aware of facts which may be prejudicial to me…”

Crane Bank ownership

One of the allegations in the case is that Sudhir was the sole owner of Crane Bank and in charge of its day to day operations.

 “As the lawyers of Crane Bank, I will require MMAKS Advocates, in particular Mr Timothy Masembe Kanyerezi among others as witnesses to defend me from these false allegations.”

“As my personal lawyers, they are witnesses to the fact that I only sat on the Board of Directors and did not run the said bank on a day to day basis, nor was I a dominant force.”

He says Masembe should be representing him because his law firm MMAKS was the “longest serving advocates of Crane Bank Ltd and personally act and have acted for him or other companies in which he has interest including Meera Investments Ltd and Goldstar Insurance Company Ltd where he is a substantial shareholder.”

In the affidavit, Sudhir revealed that on September 29, 2007, MMAKS conducted training to the directors on the duties of directors under the Financial Institutions Act, 2004.

“Prior to the training of the Board, (of which I am a member), in a frank disclosure under the confidence of advocate—client privilege, we shared the entire corporate governance structure, the organisational structure, matters relating to the day-to-day running of the Bank, and other confidential and proprietary information regarding the shareholders and directors of the Bank and thus MMAKS are aware of facts which may be prejudicial to my case,” he says.

Mpanga conflict of interest in forensic audit report

BoU’s  lawyers are relying on a forensic audit report by audit firm PriceWatercoopers (PWC) in their case against Sudhir. However, PwC noted in the report that it was not a legal practice and that comments on possible legal implications, options and considerations were based on independent legal analysis and advice given by Bowmans Uganda – another name for the law firm of AF Mpanga Advocates.

This means that Mpanga is supposed to be a witness in the case.

Lawyer David Mpanga.

Sudhir also argues following the entering into of a confidential settlement and release agreement (CSRA) with the Central Bank and DFCU on March 20, 2017, on April 4, 2017, Mpanga’s law firm availed to him an Implementation Agreement drafted and signed by David F.K. Mpanga for A F Mpanga Advocates and on behalf of MMAKS Advocates, both acting as agents of BoU.

Sudhir said in his affidavit that the two law firms shall be required as witnesses to tender in the implementation agreement and/or testify on matters relating to its negotiation, execution, implementation and breach, as well as its effect on the CSRA.

In regard to the CRSA, Sudhir reveals that the night of June 28, 2017 at 11pm, Mpanga sent him an email containing a letter of demand which he says constituted a breach of CSRA and will require the lawyer to testify to this as a witness.

On July 10, Mpanga wrote to Sudhir proposing a settlement and concluded the letter, according to Sudhir, by “threatening that if I did not sign off a consent judgement by July 12, 2017, they would commence criminal proceedings against me.”

“I will use this letter at the trial to show that BoU were using the case to blackmail me, and that the suit had been filed in abuse of court process,” Sudhir says.

Application to court to restrain Mpanga and Masembe on the case  

Sudhir through his lawyers KAA has filed an application over the Professional conduct of MMAKS Advocates and AF Mpanga Advocates (Bowmans Uganda) to be heard on Wednesday September 13.

He wants court to declare that the two law firms are conflicted in acting for BoU and Crane bank as doing so violates the advocate-client relationship and the professional conduct regulations.

He also wants court to declare that the two law firms are potential witnesses, hence barred from representing BoU in the suit.

He also wants a permanent injunction and/or restraining order to be granted restraining the two lawyers and their firms from appearing and/or acting as counsel for the central bank in the case.