The secrets behind the Sudhir saga

When contacted to comment on some of the concerns that have been raised about BoU, its Director Communications, Christine Alupo told The Independent in an email response that they are constrained in discussing matters pertaining to the court case and related details. 

“Until it is disposed of,” Alupo wrote, “We will address the enquiries about the process in due course.”

What is not clear, according to critics, is why the attorney general’s chambers cannot defend the government and instead some of the most expensive private lawyers are hired. According to BoU, it has so far paid Shs398 million to Uganda Revenue Authority as case filing fees. It is not clear how much the private lawyers are charging but BoU said it is ready to settle any fees in accordance with the law. Clearly, the fees will run into billions of shillings in a case that could drag on for months if not years.

Away from the secrets, publicly BoU has said all it wants is for Sudhir to return to Crane Bank about US$ 94 million (Approx. Shs340 billion) that he allegedly fraudulently took from Crane Bank and another Shs52 billion in NSSF benefits for expatriate staff that he allegedly failed to remit to the pensions body.

BoU also wants Sudhir’s company Meera Investments Ltd to hand over the titles of the 48 properties previously occupied by Crane Bank across the country. The properties currently are occupied by DFCU and the presumption is that DFCU has to pay rent to Sudhir’s Meera.

These cases are before court and The Independent cannot, therefore, discuss whether they have any substance or not. What is clear is that BoU and the government feels so strongly about getting the 48 branches from Sudhir that they only proceeded to court after Sudhir refused to surrender them.

In the process of suing Sudhir, BoU was forced to expose an earlier secret deal they had entered with Sudhir which, among other things, stated that if he gave BoU US$60 million and delivered the 48 titles of the branches, 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.

Breach of contract

Sudhir has 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 didn’t.

In a letter dated May 29 which The Independent has seen, 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.  When he was approached by this reporter, Sudhir declined to comment.

But his associates intimated that the charges are orchestrated by self-interested individuals. They argue that Attorney General Byaruhanga, who is also a big player in Uganda’s real estate sector, has fought with Sudhir over some properties and could be pursuing a vendetta through a lawyer, Timothy Kanyerezi Masembe of the top firm MMAKS Advocates. They point out that Masembe is a longtime Sudhir lawyer who has switched sides. They say under ethical legal practice, Masembe should not be allowed to prosecute his former client.

The Independent contacted Masembe but had not got a response by press time. The other lawyer, David Mpanga of AF Mpanga who is also representing BoU had also not responded by press time.

To prove their case, Sudhir’s side argues, in a letter dated May 18, that under the secret agreement BoU was supposed to return to him two titles of properties it had taken as soon as he paid the US$8 million.  This position is contained in an April 04 letter to Sudhir by BoU’s lawyers, David Mpanga of AF Mpanga Advocates titled “Implementation of the confidential settlement and release agreement”.

In the letter Mpanga states that the purpose of the letter was to “set out the implementation timetable of the Agreement so as to make clear what each party is required to do”.

Mpanga wrote” “It is understood and agreed that the “exchange of value for value” stipulated in clause 4.1 of the agreement shall be given effect by BoU, upon receiving $8m from you, immediately releasing the securities and duly executed releases of encumbrances of  securities”.

Since Sudhir paid the US$8m as demanded, he accuses BoU of breaching the agreement and said he was suspending implementing further the agreement, including not handing over the bank branches.

But Mutebile, without disputing that he was breaching the agreement, told the Attorney General that the “Bank of Uganda will not yield to Mr. Ruparelia’s demands because those demands have no basis under the terms of the agreement”.

Perhaps aware of the back and forth jostling, even after the case was filed, President Yoweri Museveni on July 06 called a meeting between Sudhir and Mutebile and other BoU officials and their lawyers. Museveni wanted the case resolved out of court.