The Independent Uganda: You get the Truth we Pay the Price
Isaac Bakayana, a senior lecturer at the School of Law, Makerere University, told The Independent on Aug.27 that Justice Wangutusi should possibly have looked beyond the Financial Institutions Act of 2004, the Insolvency Act, 2011, and the Company Act, 2012 before giving his verdict in favour of Sudhir on a technicality.
He said based on this, Bank of Uganda could appeal and the case could be sent back to the lower court (commercial court) for fresh hearing/proceedings.
However, Bakayana said Sudhir’s victory should be a lesson to BoU to be more cautious while placing financial institutions under receivership to avoid a similar scenario from happening.
“The central bank has to act carefully and move in quickly,” he said.
On whether this ruling would reignite legal suits as other banks that were previously closed under unclear circumstances challenge the Bank of Uganda, the law don said Sudhir’s case is different as he moved in quickly to challenge the decision of the central bank immediately he lost his bank.
He said the other banks may find it difficult to come up with the grievance in 2019 that they failed to present in years when they were closed.
“When you disagree today…move in quickly and challenge the decision,” he said. “You do not have to wait.”
However, Sudhir could sue BoU and dfcu for return of his Crane Bank assets currently occupied by dfcu.
Museveni advice ignored
The Sudhir, Crane Bank, Bank of Uganda, dfcu saga has sacked in almost all the voices that matter in Uganda’s financial sector, including President Yoweri Museveni.
Before Justice Wangutusi started hearing the case, he warned both Sudhir and Crane Bank to settle their issues out of court because “whoever loses in court will pay heavily”.
President Museveni also advised that the issues be settled out of court but the position at BoU was reportedly divided. While central bank Governor Mutebile reportedly favoured an out of court settlement, his Deputy, Louis Kasekende, reportedly favoured a court battle and lined up a battery of some of the leading commercial lawyers in town.
When it emerged that some of the lawyers were billing Bank of Uganda billions of shillings, Kasekende’s move was criticised as a ploy. Many wondered why BoU which has some of the finest commercial lawyers on its staff would hire expensive private advocates. And, as with this case, the bills just keep piling up on BOU.
This is not the first time that Sudhir is winning a case against BoU following the controversial take over and sale of his Crane Bank to dfcu.
In April this year, he defeated the central bank through courts and blocked BoU lawyers of MMAKS Advocates and Sebalu& Lule Advocates – who were also his former lawyers – from representing it in cases related to him. He cited conflict of conflict.
He also sued the central bank for non-refund of licence fees following the closure of four of his forex bureaus about two years ago. He was paid about Shs280million.
The four forex bureaus were closed in 2017 by BoU for allegedly not being “fit” and lacking integrity. They are Crane Forex Bureau (Speke Hotel), Crane Forex Bureau (Kampala Road), StanHope Forex Bureau De Change and Red Fox Bureau De Change.
