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ALL EYES ON MS MARGARET KAGGWA KASULE: Why should the Bank of Uganda legal boss be held responsible for the ‘court gamble’ against billionaire Sudhir Ruparelia which never paid off?

Margaret Kaggwa Kasule

Last week’s landmark victory for billionaire Sudhir Ruparelia against Bank of Uganda in the battle for the ‘Crane Bank’ was expected. The ruling however left many asking who was advising the Bank of Uganda on legal matters.

This follows the assessment of several accountability and legal agencies in the country including the Auditor General’s office and Parliament reports, as well as the High Court’s commercial division and Court of Appeal, which had all agreed that the Bank of Uganda had made major errors in its decision to close Crane Bank. Instead of correcting the mistakes as would say the old woman that ‘a stitch in time saves nine’, the Bank legal officer pushed the institution in a fight that has been so costly and continues to be so.

The ruling, which was made only weeks after the burial of the long serving Bank of Uganda governor, Prof Emmanuel Mutebile Tumusiime, cast a dark shadow on the long and largely good career of one of Uganda’s top economists.

Most reasonable people would agree however that the Crane Bank case should have been closed many years ago the moment mistakes in its closure of Crane Bank were identified. However, wrong judgments driven by selfish interests of decision makers at the Bank of Uganda have dragged this battle for more than half of the decade.

The mistakes which BoU officials as incompetent, mischievous and acting with impunity, have left the Bank, in money and reputation losses.

So, who is liable for these strategic legal errors?

The ruling could cast a bad shadow on the service of the late Mutebile who had given his life to the service of Uganda – from the perspective of awakening the economy. However, it is a well known fact that Prof Mutebile spent the last years of his life not in charge of the BoU affairs. The responsibility to save the bank’s reputation and loss of money, fell on three powerful officials. Two of these officials who held that power, left the Bank in disgraced; Deputy Governor Dr Louis Kasekende walked out of the bank quietly having failed to secure his term’s renewal from the President who had read through the situation at the Bank and Ms Justine Bagyenda, the former executive director in charge of commercial banks, whose tenure at the Central Bank is filled with tales of ‘abuse of power and authority’. Bagyenda also left acrimoniously, having been pushed out and replaced after questions of her role in selling off local banks became loud and raised a lot of dust.

The mess in the closure of several indigenous banks, and most recently, Crane Bank limited, which became the Waterloo for these Central Bank’s bosses which exposed them as acting with impunity and incompetence despite sitting in a priviledged positions of determining the wellbeing of the economy and financial lives for millions of people.

The former Crane Bank was placed under statutory management by Bank of Uganda (BOU) in September 2016 following a report that Crane bank had insufficient capital levels, shrinking liquidity ratios, surging loan default levels and gross mismanagement, among others.

In parliament, after a report by the Auditor General raised several questions, the Parliamentary Committee on Statutory Agencies, Commissions and Enterprises (Cosase) made recommendations which could have shaped a new Bank of Uganda.

However, officials left behind by Kasekende and Bagyenda, most prominent of them, Mrs. Margaret Kaggwa Kasule, the legal director, were not moved. Instead, they went on to pursue the mistakes of the officials who left in disgrace.

Ms Kasule should be held liable for exposing Bank of Uganda to the humiliation and reputation damage it has suffered before the courts of law, where the bank lost five cases against billionaire Dr. Sudhir Ruparelia.

As Bank of Uganda’s chief legal adviser, she failed to read through the troubles of the bank to advise, accordingly, for the last seven years. Instead she pushed the Bank from one court battle to another, until the Supreme Court, even when the Judges tried all to give the Central Bank a soft landing.

For the record, Sudhir never dragged Bank of Uganda to court. Bank of Uganda, even after stealing his bank. Instead, it was BoU and her greedy lawyers that dragged Sudhir to court, after having taken his Crane Bank, sold it for almost at free, and gave away the billionaire’s assets including the Bad Book and properties owned by Meera Investments, to DFCU bank. DFCU lawyers later realized their mistakes, and returned the properties back to BoU. On top of that, they wanted him to almost cough ugx400 billion.

Back to Ms Kasule

At one time, Sudhir’s lawyers, KAA served Ms Margaret Kaggwa Kasule for “contempt of court” in a letter dated October 12th, 2021. The legal officer had been identified as the major stumbling block in the battle which was dragging year to year. The lawyers called out Mrs Kasule for acting unprofessionally in her conduct manifested in her efforts to frustrate lawful court processes.

“Our client was the successful party in Court of Appeal Civil Appeal 252 of 2019 Crane Bank Limited (In Receivership) vs Sudhir Ruparelia & Another where the Court of Appeal upheld the decision of the High Court in High Court Civil Suit 493 of 2017 to wit that the 131 Respondent had no locus to institute proceedings against the Applicant and its plaint did not disclose a cause of action”.

BoU legal chief was accused of trying so hard to continuously frustrate the receipt of documents from Sudhir’s lawyers and misadvising the BoU in its battle over Crane Bank.

“Take notice that our client has thus decided to institute legal proceedings against you for contempt of court orders for your role in the illegal liquidation of our client’s Bank,” the KAA notice stated.

Because it was Mrs Kasule who wrongly advised Bank of Uganda to place Crane Bank into liquidation, and several other errors contested in courts, she should be held accountable.

A simple interpretation such as one the court ruled on that Crane Bank ceased to be a financial institution, by notice dated 16th October 2020 and therefore could not be liquidated, is going to make Bank of Uganda lose billions of shillings. Yet other contestable matters are on the way including the Meera Investments properties which were first donated to DFCU and later, left dilapidated across the country, which Sudhir will certainly make a killing from the courts.

Mrs Kasule without staying the execution of the judgment of the Court of Appeal, advised the Central Bank to apply for a temporary injunction restraining the billionaire from filing resolutions concerning Crane Bank Limited with Uganda Registration Services Bureau vide MA No. 32 and MA No. 33.

At the time, Sudhir’s lawyers warned Mrs Kasule, “You are the brain that has been behind all this saga of illegally liquidating Crane Bank with the sole intention of depriving our client of the fruits of the orders of the Court of Appeal. Further by insisting to file a suit showing that Crane Bank is in Liquidation, which the Supreme Court has held that it can’t be done, your conduct is illegal, mala fide, and in contempt of orders of the Court of Appeal and the Supreme Court”.

“The interests of justice, therefore, demand that a mandatory interlocutory injunction is issued to restore the status quo that existed at the time of filing Civil Appeal No.07 of 2020,” the notice continues.

“In the present case, the contempt by the 2nd respondent relates to conduct which perverts the course of justice. The attempt at circumvention of the decision of the Court of Appeal by altering the status of the 1st respondent from Crane Bank (in receivership) to Crane Bank (in liquidation) was in our view aimed at impeding or perverting the course of justice before this court and the same amounted to contempt.”

Mr Sudhir Ruparelia has been engulfed in a series of commercial battles with the Bank of Uganda since 2017, which he has won, ALL, one case at a time. There are still some cases before the courts of interest to Crane Bank and Sudhir, and given that he has won the major battle, there is no way Bank of Uganda or DFCU bank could bag any – unless they do what they should have done in the beginning – east humble pie and return the billionaire’s assets and pay damages.

BoU of Uganda, to save face, should have settled the Crane Bank long ago, but as chief legal adviser of the Central Bank Mrs Kasule failed to read through her legal notes.

Last week, political analyst Andrew Mwenda disclosed that someone at Bank of Uganda must be held accountable for refusing to settle the matter between the bank and tycoon Sudhir Ruparelia out of court.

This followed Supreme Court order to BoU to pay Sudhir all costs of all the suits filed at all levels – costs which would go in the excess of Ugx200 billion.

It is foolhardy that Bank of Uganda(BoU)/Crane Bank which went to pursue Sudhir Ruparelia and Meera Investments Limited expecting Shs.397 billion – returns empty handed, a bloody nose, damaged reputation and a bill to pay.

Legal background Mrs Kasule should have studied included; The Commercial Court in 2019 dismissing the case in which Bank of Uganda had charged Sudhir Ruparelia with having to recover Shs.379 billion from him. Mrs Kasule and her legal advisors from MAKS advocates, appealed the matter in the Court of Appeal which stayed the commercial court decision. BoU decided to run to the highest court in the land, the Supreme Court, which upheld the judgments of the lower courts.

Supreme Court Registrar Mary Babirye read the ruling on behalf of five justices of the Supreme Court; Opio Aweri, Faith Mwondha, Lillian Tibatemwa Ezekiel Muhanguzi, and Percy Night Tuhaise.

“For avoidance of doubt, the Court of Appeal upheld the finding of the trial court which ordered that the costs of the suit were to be borne by the Bank of Uganda since it was behind the filing of the suit and other subsequent actions. That order shall stand,” the Supreme Court directed.

Crane Bank was closed by the Bank of Uganda on October 20,2016, having failed to comply with a capital call on July 1, 2016. On giving reasons as to why, Central Bank Governor Emmanuel Mutebile then, said that the Bank takeover was guided by the systematic nature of the under-capitalized institution to avoid financial sector inability.

The supreme court in the last Friday ruling was the fifth legal battle Sudhir Ruparelia, the founder of the defunct Crane Bank Limited had over come against the Bank of Uganda. The ruling vindicates Sudhir Ruparelia and leaves the Bank of Uganda with an egg on its face. It further exposes the Bank’s chief legal adviser as legal gambler – whose dice however was so costly to the Central Bank at the time the institution needs every penny to pick the country from the damages of the Covid-19 economic distresses.


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