Dfcu Limited has hired one of the top law firms in Uganda when it comes to corporate recovery and insolvency as its company secretary, a break from a long-held tradition of hiring individuals rather than law firms.
Dfcu’s decision to transfer all its legal worries to Ligomarc Advocates, which was announced in a public statement, comes just over a year after the financial institution took over the assets and liabilities of Crane bank. Agnes Tibayeita has been the company secretary for the bank. In getting Ligomarc Advocates on board, dfcu could be preparing a legal showdown with a number of defaulters of the now defunct Crane bank.
“It all depends on the strategic intentions of [dfcu] bank,” Robert Kirunda, a lecturer of commercial law at Makerere University’s law school, said.
“Many banks tend to look out for experience, expertise and efficiency while looking for a law firm to hire. The banking might be looking for a broader reach, although Ligomarc is one of the biggest law firms in the loan recovery space…” he added.
It is believed a number of lawsuits are being prepared against dfcu Limited as those who were caught in the middle of Crane bank’s collapse try to recover whatever they lost.
Sudhir Ruparelia, the proprietor of Meera Investments, recently filed a suit against dfcu, seeking court orders to evict the financial institution from 46 branches. Meera says dfcu is occupying those premises illegally.
Such cases, where a company was declared bankrupt, appear to be Ligomarc’s bread and butter. Kabiito Karamagi, a partner at Ligomarc Advocates, has acted as a receiver on behalf of a number of banks.
For example, Barclays bank hired him to be a receiver of Emerald hotel 10 years ago, dfcu Limited hired him to also be a receiver of Pro-Pride Limited, while he recently acted as a receiver for Threeways Shipping Limited on behalf of Standard Chartered bank.
Kabiito is expected to be supported by Joshua Ogwal, another partner in the law firm, who used to be the head of legal affairs at dfcu. He also worked as a principal legal officer for East African Development Bank.
We called Elly Karuhanga, the chairman of the board, William Sekabembe, the chief of business at dfcu, and Agnes Tibayeita but none of the three picked our calls.