The hearing of the case pitting Uganda’s banking regulator against real estate mogul and former owner of Crane Bank, Sudhir Ruparelia, begun Wednesday at Kampala High Court.
The Bank of Uganda (BoU) accuses the businessman of siphoning $105 million from the collapsed Crane Bank over a 10-year period.
Further, BoU accuses Mr Ruparelia of fraudulently grabbing 48 properties built with Crane Bank money that he later transferred to Meera Investments, his real estate business, before leasing them back to the bank at exorbitant prices. The Central Bank is suing Mr Ruparelia and Meera Investments jointly.
The Central Bank wants Mr Ruparelia to pay back over Ush650 billion ($178.2 million), for the 48 properties, that includes interest in addition to handing over the titles.
BoU took over the management of Crane Bank in September last year, citing that the bank was “grossly undercapitalised and paused a systemic risk to the financial sector.” The Central Bank later sold the lender to DFCU Bank.
In his defence and in a counter suit against BoU, the businessman accuses the Central Bank of failing to properly execute its supervisory functions, which he says led to the collapse of his bank.
He also alleges that BoU wrote him a letter blackmailing him to settle the case out-of-court or face criminal proceedings after they had filed their plaint in June.
The real estate magnate also accuses BoU lawyers --MMAKS and AF Mpaga-- of conflict of interest and faults the Central Bank for breach of Confidential Settlement and Release Agreement. He says the two law firms have represented his Meera Investments firm.
The court battles, president over by Justice David Wangutusti, is likely to open a Pandora’s box for the Central Bank.
At least two other suits against BoU have been filed by private citizens over the collapse of Crane Bank.