Crane bank held about Shs 1 trillion in depositors’ money at the time Bank of Uganda (BoU) took over the bank late last year, documents now in court show.
This information is contained in documents filed by BoU lawyers; MMAKS Advocates and AF Mpanga Advocates in response to a counter claim lodged against the central bank by city businessman Sudhir Ruparelia.
The lawyers were responding to Sudhir’s defence in which he says that Crane bank ran into trouble as a result of the poor state of the general economy, and not because of fraud by him as the central bank had stated.
The central bank filed the document showing accounts of depositors to prove that Crane bank was insolvent but legal analysts, speaking off the record, say this does not necessarily help its case.
In the main case, the businessman is accused by BoU of overseeing the theft of about Shs 400 billion from the bank where he was a majority shareholder.
Dfcu bank acquired some assets and liabilities of Crane bank in January 2017 after BoU had taken over control. At the time its core capital, which stood at Shs 12 billion, had fallen far below the Shs 25 billion minimum requirement set by the regulator.
Banking rules don’t permit exposure of clients’ deposits but since they were submitted to court, they became public documents. Under common law, banks have a legal duty to protect the confidentiality of existing and former customers.
Confidentiality is a cornerstone of the bank-customer relationship.
In the information released by BoU, some of the top depositors at the time of the takeover included; National Social Security Fund which held 11 accounts totaling Shs 71bn; Uganda Wildlife Authority (UWA) with Shs 6b; Dr James Rwanyarare with Shs 2.2bn, National Water and Sewerage Corporation with Shs 2.1bn; city businessman Godfrey Kirumira with Shs500 million; Fountain Publishers Shs 1bn, Crane Financial Services with Shs 451 million.
Others are Capt Sanday Newman with Shs 300m, John F.Z. Barenzi with Shs 300m, Prof. GW Kanyeihamba with Shs 221m, Lohana Community of Kampala had Shs 220m, UAP Financial Services with Shs 400m, Children of Grace Uganda with Shs 436m and Hotel Africana staff saving scheme that had Shs 480m, and BV Ruparelia had Shs 2m.
Though Sudhir is accused of singlehandedly running down the bank, in August Dfcu revealed that acquisition of Crane bank in January 2017 was one of the major reasons dfcu became Uganda’s largest bank by profitability.
In its 2017 half year results, dfcu revealed an after-tax profit surge of Shs 114 billion, compared to Shs 23 billion over the same period in 2016.