Saleh’s hand in Sudhir BoU fight revealed

BoU also alleged that Sudhir concealed his 100% ownership of Crane Bank by introducing fake shareholders including his wife and three adult children, one Kasiklal Kantaria of a phantom company called White sapphire, one Jitendra Sanghani, and businessman Godfrey Kirumira.

The basis of these allegations was reportedly a forensic audit by Price Waterhouse Coopers, commissioned by the Central Bank.

In his counter suit, Sudhir accused BoU of breaching a Confidential Settlement and Release Agreement (CSRA) agreement of March 20 agreement in which the two parties had agreed to settle their differences amicably.

The agreement stated that if Sudhir gave BoU US$60 million in cash and properties, BOU would ensure that he is not sued by any claimant either in a civil or criminal court. Under the agreement, BoU undertook to secure Sudhir from any prosecution and compensate him for any harm or loss caused by prosecution.

Sudhir had paid US$8 million to cover one case in which he allegedly lent himself money from Crane Bank, which is not allowed under banking law. After paying this amount, according to the agreement, BoU was supposed to return some properties to him but did not.

Instead, in a letter dated May 29, Mutebile informed the government, through the Attorney General William Byaruhanga that he had instructed lawyers to start criminal charges against Sudhir because he had refused to comply.

Through Meera Investments Ltd (MIL), the tycoon also sued dfcu Bank, seeking to reclaim leasehold titles and developments for 48 banking halls taken over by the latter when Crane Bank was liquidated.

MIL also sued the Commissioner for Land Registration, accusing them of conniving with dfcu Bank to transfer the leases into the latter’s names without its consent.

The Independent has seen a lease agreement showing that the properties belong to MIL, which valued them at Shs. 100 billion but dfcu Bank acquired these documents at Shs 10 billion and immediately valued them at Shs47 billion much to Sudhir’s chagrin.

The Independent understands that due to the controversy surrounding the properties, dfcu’s lawyers have advised the bank that it was likely to lose them to Sudhir.

Also, BoU and dfcu have suffered major setbacks in their court case, albeit of a technical not substantial nature.

For instance, Justice David Wangutusi, kicked off the case the two key BoU lawyers Timothy Masembe Kanyerezi of MMAKS Advocates and David Mpanga of AF Mpanga/Bowmans on grounds of conflict of interest.

Sudhir had asked that the two are removed from the case because they represented Crane bank until October 20, 2016, when BOU took over its management and thus the law firms shared confidential information with the central bank, which they were now using against him.

In response to this charge both Masembe and Mpanga had argued that there was no conflict since they represented Crane bank, which is a separate entity from Sudhir, who was now being sued as an individual.

However, the judge pointed out that the two, in their main pleadings while acting on behalf of BOU, had accused Sudhir not only of being the sole owner of Crane Bank, which is against the Financial Institutions Act but also running the bank on his whims, suggesting that he was running its day-to-day activities.

“The meaning of this, is that Crane bank and Sudhir were one and the same person,” Justice David Wangutusi noted adding, “ So going by that it means that there was a fiduciary relationship between the applicant (Sudhir) and first (Masembe) and second (Mpanga) respondents.”

Even the third law firm BoU hired suffered almost a similar fate—almost bringing the BoU case to a standstill. As the central bank was still reeling from these losses, an agreement BoU had entered with dfcu over the sale of Crane Bank leaked, raising a storm. This storm fuelled tensions at BoU resulting into the February reshuffle in which Mutebile fired Bagyenda and shuffled top officials at the bank.

A combination of all these saw Museveni intervene and put in place a committee to resolve this chaos. It is this committee that had quieted the storm at BoU and bought officials at the central bank time to re-strategise against Sudhir. It appears the contest is about to resume. What is not clear is whether Saleh will be an arbiter or a contestant.