MPs roast Sudhir Ruparelia on Crane Bank closure ‘ ‘ You were running the bank as a family business”

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City tycoon Sudhir Ruparelia and the former directors of defunct Crane Bank Limited (CBL) had a tough time on Wednesday when they faced COSASE team probing the closure of the seven commercial banks.



Mr. Joseph Biribonwa explained to the committee the circumstances under which the once powerful Bank that scooped awards every year was closed.
His presentation was followed by questions from the MPs
Hon. Francis Mwijukye, the Buhweju MP asked: ‘‘You claim your bank was illegally, unfairly and unprofessionally closed. According to you, why was your bank closed’’
The CBL team tactically dodged the question. Crane Bank was closed on 20th October 2016.
“Crane Bank has been on the BOU watch list since September 2015 after regular onsite tests and external audit report. Crane Bank capital had fallen below the 50 per cent legal requirement under the law,” Bank of Uganda Governor Emmanuel Tumusiime Mutebile said in a statement following closure of CBL.



In their presentation, CBL team noted that they were forced to take over National Bank of Commerce (NBC) against their wish.
‘‘You claim, you were compelled to buy NBC, a bank you were not interested in. How exactly did BoU do this? Asked Hon. Moses Kasibante the Rubaga North MP
‘‘On the evening of 27th March 2012, the then MD Crane Bank, Mr. A.R Kalan called a meeting of the directors to discuss the NBC takeover’’ Sudhir told the committee
He did not provide evidence to prove this claim.
COSASE was recently told that, the NBC was closed on 27th March 2012 and sold on the same day.



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The MPs then wondered whether Crane Bank was contacted on same day and they took the decision there and then.
There is a claim that Sudhir was the only shareholder of Crane bank. Perhaps this explains why it was easy to take the decision -to buy NBC.
The Rubaga North MP, also asked Crane Bank team to explain claims that of the 570 billion alleged Crane Bank bad books, Crane Bank shareholders and [Sudhir in particular] held a sizeable percentage of it.
Speaking at the 20th Anniversary Dinner for the Uganda Securities Exchange (USE) in April last year, Bank of Uganda Deputy Governor Bank of Uganda Dr Louis Kasekende said :
“the insolvency of Crane Bank was not caused by any problems in the wider economy; it was caused by its own mismanagement, not least by its extensive insider lending.”



The MPs borrowing from the learned friends- ‘He who comes for equity must come with clean hands’’ asked
‘‘You claim BoU selectively went for DFCU as the Buyer of Crane Bank. Records show you were also selectively for the NBC takeover’’
On claims that BoU was only interested in closing Crane Bank as opposed to saving it, Hon. Among asked ‘ ‘ Bank of Uganda says, your bank was closed due to under capitalization. When did you come to know that your bank was undercapitalized?’’
‘‘In the exit meeting March 2016, we were asked to provide more for the bad loans’’ Mr. Joseph Biribonwa said.
He explained to the committee the circumstances under which the once powerful Bank that scooped awards every year was closed.



His presentation was followed by questions from the MPs
Hon. Francis Mwijukye, the Buhweju MP asked: ‘‘You claim your bank was illegally, unfairly and unprofessionally closed. According to you, why was your bank closed’’
The CBL team tactically dodged the question. Crane Bank was closed on 20th October 2016.
“Crane Bank has been on the BOU watch list since September 2015 after regular onsite tests and external audit report. Crane Bank capital had fallen below the 50 per cent legal requirement under the law,” Bank of Uganda Governor Emmanuel Tumusiime Mutebile said in a statement following closure of CBL.
In their presentation, CBL team noted that they were forced to take over National Bank of Commerce (NBC) against their wish.



‘‘You claim, you were compelled to buy NBC, a bank you were not interested in. How exactly did BoU do this? Asked Hon. Moses Kasibante the Rubaga North MP

‘‘On the evening of 27th March 2012, the then MD Crane Bank, Mr. A.R Kalan called a meeting of the directors to discuss the NBC takeover’’ Sudhir told the committee
He did not provide evidence to prove this claim.
COSASE was recently told that, the NBC was closed on 27th March 2012 and sold on the same day.
The MPs then wondered whether Crane Bank was contacted on same day and they took the decision there and then.
There is a claim that Sudhir was the only shareholder of Crane bank. Perhaps this explains why it was easy to take the decision -to buy NBC.



The Rubaga North MP, also asked Crane Bank team to explain claims that of the 570 billion alleged Crane Bank bad books, Crane Bank shareholders and [Sudhir in particular] held a sizeable percentage of it.
Speaking at the 20th Anniversary Dinner for the Uganda Securities Exchange (USE) in April last year, Bank of Uganda Deputy Governor Bank of Uganda Dr Louis Kasekende said :
“the insolvency of Crane Bank was not caused by any problems in the wider economy; it was caused by its own mismanagement, not least by its extensive insider lending.”
The MPs borrowing from the learned friends- ‘He who comes for equity must come with clean hands’’ asked
‘‘You claim BoU selectively went for DFCU as the Buyer of Crane Bank. Records show you were also selectively for the NBC takeover’’
On claims that BoU was only interested in closing Crane Bank as opposed to saving it, Hon. Among asked ‘ ‘ Bank of Uganda says, your bank was closed due to undercapitalization. When did you come to know that your bank was undercapitalized?’’
‘‘In the exit meeting March 2016, we were asked to provide more for the bad loans’’ Mr. Joseph Biribonwa said.

read: The rise and fall of Crane Bank: here is what went wrong

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