Sudhir Ruparelia, dfcu Bank Face Off in £200m London High Court Trial Over Crane Bank Sale

A high-stakes legal dispute, involving a claim of approximately £200 million (Shs1 trillion), is unfolding at London’s Royal Courts of Justice. Businessman Sudhir Ruparelia, representing former shareholders of Crane Bank, is spearheading a lawsuit against dfcu Bank, its holding company, directors, and international partners.

The trial centers on the 2017 sale of Crane Bank’s assets and liabilities to dfcu Bank, an event that followed the Bank of Uganda’s (BoU) statutory management of Crane Bank in October 2016 due to capital inadequacy. Claimants allege that the transaction was unlawful, corrupt, and occurred at a significantly undervalued price.

Central to the allegations is a purported $27.5 million payment linked to loan disposals, which claimants suggest may have involved bribery, citing an internal email indicating funds could go to the central bank unrecorded. The claimants also refer to a 2019 Ugandan Parliamentary inquiry which found that the BoU breached legal provisions during the bank’s resolution.

Defendants, including dfcu Bank and entities like Norfund and Rabobank, vehemently deny all accusations. They assert that the transaction was conducted in good faith by the BoU to ensure financial sector stability. dfcu Bank emphasizes that it acquired selected assets and liabilities, not the entire corporate entity, and that independent valuations were conducted.

Further scrutiny comes from a special audit report by Uganda’s Auditor General, John Muwanga. This report highlighted the withdrawal of over Shs478.8 billion by BoU officials for “liquidity support” to Crane Bank without adequate documentation or justification. The audit also questioned significant expenditures on external service providers, including auditing and law firms.

The 16-week trial will involve a deep examination of Crane Bank’s financial records prior to its takeover and the BoU’s subsequent actions. Both sides are represented by prominent international law firms, signaling the global significance of this Ugandan banking dispute.

This case is being heard at the London High Court, originating from the Daily Monitor (Uganda).