Central bank lawyers disqualified from Sudhir's case

Sudhir in court. Photo by Meddie Musisi

The Commercial court has disqualified Bank of Uganda (BoU) lawyers from sh397b Sudhir Ruparelia's case, citing conflict of interest.

In his ruling delivered today, the head of the division, Justice David Kutosi Wangutusi stated that David Mpanga of A.F. Mpanga Advocates and Timothy Masembe of MMAKS Advocates acted in violation of the Advocates (Professional Conduct) regulations.

Section 4 of the regulation provides that an advocate shall not accept instructions from any person in respect of a contentious or non-contentious matter if the matter involves a former client and the advocate as a result of acting for the former client is aware of any facts which may be prejudicial to the client in that matter.

This means that BoU has to hire services of other lawyers to representation in the main suit.

BoU sued sudhir and Meera on behalf of Crane Bank which is under receivership of the regulator in the unprecedented case involving purported sh397b fraud orchestrated in a commercial bank on a scale that has not been witnessed in the country's recent history.

The judge's ruling was delivered in court by Registrar Lillian Bucyana in the presence of sudhir, his lawyers and BoU legal officers.

Although BoU lawyers claimed that they represented Crane Bank and not Sudhir as a person, Justice Wangutusi said they are potential witnesses in the main suit.

"There was a possibility of disclosure of information by Sudhir to the said lawyers since they participated in negotiations with him over company matters," he noted.

The Principal Judge Yorokamu Bamwine is currently mediating over the main case.

BoU took over the management of Crane Bank last November, putting it under receivership after establishing that it was over leveraged. According to BoU, Crane Bank liabilities exceeded its assets, rendering it insolvent and hence posed a systemic risk to the banking industry.
 
In January 27, 2017 DFCU acquired Crane Bank assets and liabilities following the conclusion of the purchase and assumption agreements with BoU.
 
Crane Bank was the fourth largest commercial bank in Uganda licensed and supervised by BoU as at end 2015. It started operating in August 1995 offering corporate and retail services. The bank focused on micro, small and medium sized business.
 
In September 2012, the bank acquired assets and some liabilities of the National Bank of Commerce, indigenous financial service providers in Uganda that had lost its banking license.