Members of Uganda’s parliament have been keen to point fingers at Bank of Uganda for being culpable in a way, or many for Sudhir Ruparelia’s current woes with many financial analysts fearing for the stability of the other banks and wondering “where BOU was” when all the Crimes they accuse the Proprietor of committing were taking place.
Logically, If all these accusations were to turn out true as shall be decided upon by the courts of Law, then BOU would directly share a large portion of the blame for many things including negligence, connivance, incompetence, misleading or mismanaging a client to mention but a few.
A Bank of Uganda investigation into the mismanagement of Crane Bank says its proprietor, Sudhir Ruparelia, embezzled over sh400b through what they called highly sophisticated fraudulent transactions.
Bank of Uganda (BoU), through the Crane Bank now under receivership, has of recently sued the embattled tycoon and his Meera Investments Company, to force him to pay back the money with interest, according to court documents seen by our Moles. Sudhir was also forced to surrender his Forex Bureaus and many property with several of his land titles to strategic property confiscated, claims Forbes Magazine that once listed him as the Richest man in Uganda.
However, many Ugandans were shocked recently to see the successful and strategic business magnate counter suing Bank of Uganda for “Breach of Confidentiality” with many questioning what exactly this Agreement between the two parties entailed and querying whether the regulator should actually be signing such agreements with investments that deal directly with public interests such as banking. Disclosure of such agreements would also complicate the matters further for the Regulator, some lawyers argue.
Could this have been one of the Reasons the Regulator apparently may have actually been aware of any anomalies but chose to intentionally Keep quiet until Crane Bank was beyond redemption?
This scenario would subsequently lead to pointing of longer fingers at the Regulator whose major role is to actually in many ways “regulate and guide” the Commercial banks to avoid them ever reaching such apocalyptic levels that culminated into one of East Africa’s most successful locally owned Banks being shut down to the loss of the Ugandan economy. This in a way would leave Bank of Uganda answerable and responsible for the repercussions of their failure to Regulate, sanction, warn and Help the Bank cope as is required by law. Some Lawyers have also argued that this maybe one of Sudhir’s best defenses if properly constructed.
It is not uncommon for banks In the West to sue their Central Banks over their collapse and they would have valid ground as long as they can prove that the regulator was negligent or “not helpful” to them when they needed guidance of direction.
It must also be noted that Sudhir has been very instrumental in the development of Uganda’s economy over the years with significant interests in Real Estate, Banking, Export etc and his demise of misery does not necessarily benefit any party, with the government standing to lose most as a result of any negative friction between the two. He has over the years created employment for thousands of Ugandans and paid millions of dollars in taxes to the government of Uganda and his importance and benefits to the future of Uganda’s economy is not disputed.
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