CRANE BANK DEMANDS RETURN OF LOAN BOOK VALUED AT 570BN
The Vice chairman of the defunct Crane Bank, Business man Sudhir Ruparelia has demanded for the return of the banks bad loan book, which he values at 570 billion shillings.
The bank was closed in October 2016 and sold to DFCU three months later.
Sudhir made the appeal during a presentation by shareholders of the bank before Parliament's Committee of Commissions Statutory Authorities and State Enterprises, COSASE.
According to the former chairman of Crane Bank Joseph Biribonwa the bank of Uganda had a pre-meditated plan to asset strip Crane Bank and sell it to a preferred buyer.
He told MPs that Bank of Uganda frustrated the efforts of share holders to bring in equity investors.
Birobonwa had earlier told MPs that the liquidity crisis at the bank had been caused by an economic downturn in 2014/2015.
He blamed the central Bank for causing loss of confidence in Crane Bank in April 2016, by halting the bank from issuing letters of credit, bonds and bank guarantees. In addition he said the BOU placed a lien on treasury bills held by the Central Bank worth 169 billion shillings.
These actions he said killed the bank, since they caused capital flight and serious reputation damage.
The lien on treasury bills also led to equity investor Atlas Mara losing interest in Crane Bank.
He revealed that the shareholders had raised capital amounting to 8 million dollars, which funds were detained by Bank of Uganda and not allowed in the bank.
He also disclosed that on 19th October 2016 Crane bank had agreed to terms of a loan from the central bank amounting to 79.2bn shillings, but the central bank moved to take over the bank that very night at 11pm.
He noted that Bank of Uganda made the decision to sell Crane Bank in November 2016. This was less than a month after the take-over and in violation of the financial institutions act.
The chairman of Ruparelia Group who was vice chairman of Crane Bank Dr. Sudhir Ruparelia told the MPs that the shareholders of the bank demand the return of the bad loan book that was handed to Dfcu.
He is also wants the return of 23.5 million dollars raised by the shareholders and held by the Bank of Uganda.