Dfcu Bank and its customers are in for turbulent business times as the bank has been thrown out of 22 properties housing their countrywide branch network that belong to business magnate Sudhir Ruparelia’s Meera Investments.
Under the cover of darkness at the stroke of midnight, Dfcu began a process to vacate their Kampala Road, which used to be Crane Bank’s headquarters, but the process hadn’t been completed by morning and hawk eyed Ugandans captured the bank’s property being ferried out in truck loads.
Following a landmark court victory for business man Sudhir Ruparelia against Bank of Uganda in August last year, it was going to be a rough time for Dfcu that acquired Sudhir’s Crane Bank Limited, after BoU had put it under statutory management.
BoU and Crane Bank had sued Sudhir for allegedly siphoning money out of his bank, allegations the business man termed as bogus and court exonerated him.
Sudhir also won the battle for his Meera Investments properties that had been taken over by Dfcu. BoU claimed Sudhir had transferred the branches from Crane Bank to Meera before leasing them out to Crane Bank again.
Sudhir’s lawyers had argued basing on the Land Act which stipulates that a non-citizen cannot possess free-hold property. Crane Bank’s majority shareholding was White Sapphire Ltd, a company incorporated in Mauritius, which meant the bank couldn’t own property.
Surprisingly BoU had handed the disputed properties to Dfcu and Dfcu had transferred the properties to their names before the case could be disposed of.
Dfcu Bank has been sailing a rocky ship ever since the January 2017 takeover of Crane Bank and now they are bound to face their biggest business inconvenience ever as they rush to vacate 22 properties housing part of their countrywide branch network that belong to business magnate Sudhir Ruparelia and his Meera Investments.
Dfcu transferred the properties on the ill advice of their lawyers Sebalu & Lule Advocates. By the time of the case hearing, court had declared Sebalu & Lule conflicted and unfit to represent any client against Sudhir as they had previously served as his lawyers.
A leaked memo dated May 8, 2017, indicated that Dfcu was reluctant to transfer the contestable properties into their names fearing that BoU and Crane Bank (in receivership) may fail to legally acquire the properties from Sudhir’s Meera Investments.
Dfcu had preferred to place a caveat on the properties till BoU had taken their ownership from Sudhir and his Meera Investments.
Sebalu & Lule instead advised Dfcu to transfer the contested properties into the bank’s names, a move that legal experts have criticized as rushed.
In the Asset Purchase Agreement between BoU and Dfcu, BoU had 24 months to recover the said properties from Meera, but if the Central Bank failed to recover the properties within the stipulated 24 months, Dfcu would rescind the purchase of the leasehold properties, return to BoU the certificates of title, duly retransferred into the names of CBL and deliver up to BoU vacant possession of the leased properties. BoU would in return refund a portion of the purchase price equivalent to the value of the properties.
The reason BoU made a two-year provision was because the matter was contentious and they were in the process of asking court to compel Meera Investments to hand over the titles of said properties to BoU.
Instead of awaiting a court verdict Dfcu had transferred the properties to their names and when Sudhir won the BoU case, they went into panic mode and decided to return the titles to BoU.
When news leaked that Dfcu would be leaving the 22 properties, the bank first denied the news, but a notice sent by Dfcu Managing Director Mathias Katamba confirmed the development.
Dfcu then sent out bid invitations to various firms to provide “architectural and project management consultancy services to support relocation of 22 selected business locations across the country.”
Sudhir awaits billions in compensation for tresspass
By Dfcu conceding early defeat and vacating Sudhir’s premises, the business magnate is set to also benefit from another case where he dragged Dfcu to court for failing to pay rent worth several billion shillings. Sudhir’s Crane Management Services and Meera Investments demanded over Shs32billion from Dfcu, which was a successor in title to Crane Bank Ltd in accrued rent. These figures have since gone up as Dfcu occupied the properties on the false assumption that they owned them.
During a Parliament probe into the sale and transfer of several commercial banks, it was revealed that there was fraud among BoU officials and beneficiaries of the transfers. In particular, several anomalies were noted in the Crane Bank case. Sudhir vowed that those involved in illegally taking his bank would “cough it” and that is what’s happening.