Crane Bank Directors still liable for $115million
KAMPALA, FEBRUARY 07 – Even with the recent takeover of its assets by rival lender DFCU, the embattled shareholders of Crane Bank Limited (under receivership) are not yet out of the woods as the Bank of Uganda continue to pursue recovery of the bank’s non-performing assets.
256BN has learned that the central bank has slapped a collective bill of $115 million on the defunct lenders shareholders with principal shareholder Sudhir Ruparelia being personally held liable for $100 million of that amount.
According to the banking industry’s grapevine, Sudhir has been given two options – pay up the missing money in cash or else return to the custody of the receiver manager, the securities borrowers initially used to secure the loans that have now gone toxic.
DFCU completed the purchase of Crane Bank’s more palatable assets on January 27, but it was allowed to cherry pick among the liabilities.
Sources say the circumstances leading to Sudhir’s current predicament started just over a decade ago when bent on growing into Uganda’s largest property mogul, he began transferring to Crane Management Services, titles to the properties of borrowers who failed pay loans. While under conventional banking such properties are supposed to be put on the market to make provisions for the bad loans, Sudhir never bothered to fill the hole.
Instead whenever Bank of Uganda auditors made their supervisory rounds, the tenure of the bad loans and the associated securities would temporarily be lent back to Crane Bank to create the impression that the loans were provisioned for and all is well.
“That is how for decades, he has been able to fool the Bank of Uganda’s ‘Iron Lady’ Ms Justine Bagyenda, the no nonsense Director for Supervision at the central banker.
Although this news site was not able to get the timelines within which Sudhir and his co-shareholders are supposed to comply, either way, the call is a tall order for the embattled carpet-bagger. One possible scenario according to analysts is that his stature as a property mogul could diminish significantly, since his properties are over-valued and it would take several to fill the $100 million hole. The other possibility is that he will fork out the $100 million, but this will leave so handicapped that it tame his capacity to plat in Uganda’s property market.