The Commercial Court has cleared Prime Minister, John Patrick Amama Mbabazi and his business partners Ruhakana Rugunda and Amos Nzeyi on allegations that they had committed fraud
By Hillary Nsambu
The Commercial Court has cleared Prime Minister, John Patrick Amama Mbabazi and his business partners Ruhakana Rugunda and Amos Nzeyi on allegations that they had committed fraud in their dealings relating to the National Bank of Commerce.
Retired Supreme Court Justice George Wilson Kanyeihamba and 320 other bank shareholders had accused the defendants of fraudulently transferring business and assets of Kigezi Bank of Commerce (KBC) to the National Bank of Commerce (NBC).
Kanyeihamba and his co-plaintiffs had also dragged the Attorney General and the National Bank of Commerce itself, now in liquidation, to court alleging that they also conspired with the defendants and fraudulently constituted NBC into which they transferred the business and assets of KBC, which they had earlier started.
Justice David Kutosi Wangutusi, head of the Commercial Court, yesterday agreed with Dr Joseph Byamugisha and Fred Muwema, who asked the court to clear their clients of any fraudulent acts, submitting that the registrar of companies registered the change of name and company of the bank from private company limited by shares into a public company limited by shares after the shareholders and the board had agreed upon it in their general meeting.
In the ruling read by deputy registrar Thadeus Opesen, the judge ruled that the plaintiffs had failed to prove fraud against any of the defendants.
“It is therefore, my finding that save for one meeting which was as earlier seen in this judgment called with undues regard to the Memorandum and Articles of Association of Kigezi Bank of Commerce the defendants did not otherwise disregard the Memorandum and Articles of Association.
It is also my finding that the change of name of Kigezi Bank of Commerce to National Bank of Commerce (U) Ltd has not been proved to be fraudulent or unlawful,” Wangutusi said.
The court ruled that although the plaintiffs had asked the court to order for Kigezi Bank of Commerce to repossess its assets, the change of name was only in the name and that the bank had never disposed off any property and that whatever profit was made by National Bank of Commerce remained the bank’s property albeit under a different name.
“Since the change of name did not change the company, there could be no loss by one company to the other and; therefore, none of the defendants is found liable to make good any loss. The plaintiff having failed to prove liability of the defendants, this matter is accordingly dismissed with costs,” Wangutusi finally ruled.
The plaintiffs had sought judgment against the defendants for declarations that the acts of the defendants in total disregard of the Memorandum & Articles of Association of Kigezi Bank of Commerce (KBC) were unlawful, fraudulent and detrimental to it (KBC) and to the economic interest of their bank.
Kanyeihamba and his group had also sought a declaration that the sale and distribution of shares after the creation of the National Bank of Commerce were done in disregard of the memorandum and articles of association and were fraudulent and illegal and void.
The plaintiffs had also sought for orders to direct the registrar of companies to deregister the name National Bank of Commerce and revert to the original name of Kigezi Bank of Commerce.
Dr Kanyeihamba loses NBC bank case