According to the banking industry’s grapevine , 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.
Business Guide has learned that the central bank has slapped a collective bill of $115 million on the defunct shareholders of crane bank, with its principal shareholder Sudhir Ruparelia being personally liable for $100,
Accordingly, 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.
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.
Crane bank, once the largest local bank in terms of assets, whose spectacular growth saw it spread wings to neighbouring Rwanda, a first for a Ugandan bank, was first taken over by Bank of Uganda.
Consequently, the board of the bank, which includes property mogul Sudhir Ruparelia, its vice chairman, as well as the acting managing director, were removed. A statutory manager, Edward Katimbo Mugwanya, was appointed to run the bank on BoU’s behalf.
After thorough vetting, DFCU emerged winner amongst 13 institutions that bid for Crane Bank and has since taken over Crane bank.