Six years after the collapse of the same commercial bank, the Bank of Uganda (BoU) is seeking to hire an independent audit firm to perform a full audit of the now-defunct Crane Bank's current state of affairs. According to a local newspaper advertising, BoU is presently requesting bids from interested audit firms to undertake the audit. The auction will close on December 2.
"The Bank of Uganda wants sealed bids from competent bidders for the procurement of an audit company to do a comprehensive audit on the state of affairs of the defunct M/S Crane Bank Limited," according to the advertisement.
"The bid document may be inspected online under the procurement page on the Bank of Uganda website and will be supplied to interested bidders upon payment of $50 through money transfer," according to the bid advertisement.
It is unclear why the Central Bank is interested in assessing the assets and liabilities of a bankrupt financial entity that was transferred to DFCU Bank six years ago.
BACKGROUND
On October 20, 2016, Crane Bank Limited, controlled by local businessman Dr Sudhir Ruparelia, was put under statutory administration for failing to satisfy the criteria of Financial Institutions Act Sections 87(3) and 88. (1).
Under Section 94 of the Financial Institutions Act, the bank was placed under receivership, and a portion of its assets and liabilities were eventually transferred to DFCU Bank. Crane Bank, which was in receivership at the time, filed a commercial action in the High Court Commercial Division in June 2017 seeking at least Sh397 billion from the bank's main shareholder, Mr Sudhir Ruparelia.
According to the lawsuit, Sudhir was accused of misappropriating funds while serving as a bank director and shareholder of his Meera Investment Company.
On August 29, 2019, then-presiding judge David Wangutusi dismissed the multibillion-dollar business dispute, stating that Crane Bank lost its legal power to sue or be sued by Mr. Ruparelia when it was placed in receivership.
After being displeased with the Commercial Court's ruling and conclusion, Crane Bank filed an appeal with the Court of Appeal, which was likewise dismissed on the same reasons as the lower court.
This did not prevent the Central Bank from seeking justice from the Supreme Court (the highest court in the country's legal system), but it dropped the appeal before the court could hear it, causing the Supreme Court to find in Sudhir's favour and restore Crane Bank to its shareholders.
Sudhir suffered a huge blow in October when the London High Court in England ruled in favour of dfcu Bank, its directors, and shareholders in a case filed by the failed Crane Bank and six of its directors, claiming Shs816 billion (about 170 million pounds).
After a month, the Bank of Uganda is now seeking an independent audit firm to offer an informed condition of affairs for the defunct bank.