Africa-Press – Uganda. The Commercial Court has thrown out with costs a case in which businessman Amos Nzeyi was challenging the takeover of his bank, the National Bank of Commercial (NBC) by the central bank and the eventual sell to Crane Bank in receivership, and later to dfcu Bank.
While dismissing the case last week, Justice Steven Mubiru said the businessman had not diligently followed up his case to prosecute it to its logical conclusion.
“This suit has been pending since 2017 and then today when hearing is supposed to commence, the plaintiffs (Mr Nzeyi and NBC) have failed to turn up to adduce evidence,” Justice Mubiru ruled on May 26.
“Accordingly, the suit is dismissed with costs to the defendants,” he added.The other defendants, who had been sued were businessman Sudhir Ruparelia in his then capacity as the vice chairman, director and shareholder in then Crane Bank and Mr Rasiklal Kantaria, a Kenyan businessman, who then doubled as one of the shareholders in then Crane Bank.
In his analysis, the judge explained that where the defendant (the sued party) appears and the plaintiff (the sued party) is called on for hearing, the court is empowered to make an order that the case be dismissed unless the sued party admits the case, which was not the issue here.
This case arose in 2017 when Mr Nzeyi petitioned court claiming that BoU’s sell of NBC to then Crane Bank on September 27, 2012, was done in bad faith and in breach of its non-delegable statutory duties under the Financial Institutions Act.
He had further sought: “A declaration that the purported winding up and liquidation of NBC by the 1st defendant (BoU) was irregular, illegal, null and void.”
Mr Nzeyi had also wanted court to order BoU and Crane Bank in receivership to furnish an inventory of assets and liabilities of NBC at the time of the takeover.
“An order directing the 1st defendant (BoU) to render a true and proper account of all the assets of NBC at the time of take over,” court documents had stated in part.
The businessman had also wanted court to order central government to furnish the NBC liquidators with a forensic investigation report together with the final liquidation report.
Background
In September 2012, BoU took over NBC and sold it to Crane Bank owned by Mr Ruparelia at the time. BoU through its then Deputy Governor, Dr Louis Kasekende, explained that the taking over the management of NBC at the time was because the bank was operating below the required standard capital of Shs10b.
NBC was co-owned by former Prime Minister Amama Mbabazi, Mr Nzeyi and outgoing Prime Minister, Dr Ruhakana Rugunda as being the majority shareholders with over 86 per cent. The remaining 320 shareholders, owned 14 per cent.
They among others included Dr Ezra Suruma, Maj Gen Jim Muhwezi and retired Supreme Court judge, George Kanyeihamba.
