A Netherlands based Rabobank and two of its former senior bankers go before a UK court on Monday to answer claims from Ugandan billionaire Sudhir Ruparelia, who is seeking at least €200 million ( Ugs. 800bn ) in damages over what he says was the unlawful sale of his Crane Bank in Uganda.
Ruparelia and other former owners of the East African bank argue it was sold far below market value in a corrupt process, and that Rabo and the Dutch development bank FMO were among those who illegally benefited from its proceeds . His lawyer expects the claim to increase.
This will be yet another legal battle Sudhir Ruparelia is determined to take on against all the financial institutions and or companies that he strongly claims illegally, fraudulently and in a corrupt way seized and sold his Crane Bank -he worked so hard ,for so long to grow -into one of the leading banks in East and Central Africa .
The Ugandan billioner has already registered numerous coourt victories against the Central Bank in the Uganda High Court, Court of Appeal and Supreme Court .
In 2019 ,the Parliament of Uganda in an inquiry through its Committee on Commissions, Statutory Authorities and State Enterprises, which was chaired by veteran politician and lwayer Abdu Katuntu , criticised the sale and concluded that the Bank of Uganda had broken the law on several points.
Mr. Sudhir Ruparelia determined to get justice in his Cran Bank case
Ruparelia founded Crane Bank in the 1990s.
In 2016 Uganda’s central bank placed it under administration, saying it was in serious financial difficulty.
Three months later its assets and liabilities were sold to local rival DFCU.
DFCU is indirectly owned by investors including Rabo Partnerships, a Rabobank subsidiary, and FMO, with Norway’s development investor Norfund also holding a stake. FMO is not a defendant in the case.
Speaking to a dutch financial newspaper Het Financieele Dagblad (FD), Ruparelia describes the sale as a corrupt scheme by the central bank to take his bank from him, and says DFCU, Rabo and the Norwegians, along with other defendants, helped carry it out and profited.
He says his life’s work was taken away.
Ruparelia spoke of a ‘corrupt’ plan by the central bank to take his Crane Bank He accuses the Rabo subsidiary and two former Rabobankers who sat on DFCU’s board, Albert Jonkergouw and Willem Cramer, of approving the deal despite clear warning signs.
In particular, he says both received an email in late 2016 indicating that $27.5 million from the sale of a portfolio of Crane loans would go to the central bank without being recorded.
Ruparelia characterises this as bribery.
He further alleges that DFCU acquired the bank without an independent valuation, having been approached by the central bank before the administration and promised a price well below market value.
Rabobank and the other defendants say they cannot comment on the substance while the case is before the courts.
The lawyer for Jonkergouw and Cramer, the Ugandan central bank and FMO also declined to comment.
Norfund says it rejects all the allegations.
In its defence filed with the court, DFCU likewise rejects every accusation and denies that the central bank acted corruptly. It maintains that Crane Bank was seriously undercapitalised.
DFCU says the claimants never challenged the administration of Crane Bank in the Ugandan courts According to DFCU, the disputed $27.5m payment had a legitimate purpose: repaying the central bank’s emergency support. It adds that KPMG assisted with the valuation of Crane, and that the claimants never contested the administration before a Ugandan court.
Uganda’s parliament did, however, criticise the sale in 2019, concluding that the central bank had broken the law on several points.
Ruparelia also points to the US conviction and prison sentence of Hong Kong intermediary Patrick Ho for bribing Uganda’s foreign minister. Ho was acting for a Chinese conglomerate which, according to the claimants, had been offered Crane Bank by the central bank.
When that fell through, DFCU allegedly entered the picture.
Whether the claimants can persuade the London court that DFCU and its partly Dutch backers are also at fault will become clear in the coming months. Lengthy hearings are expected, given the large volume of internal emails, presentations and confidential documents the claimants obtained from the other side.
London’s law firms have been busy with the case for some time.
Ruparelia and the other claimants are represented by international firm Greenberg Traurig. He says he has already spent tens of millions on the case and can sustain that pace, given his estimated fortune of around $1bn.
Facing them are leading firms including Freshfields for DFCU, A&O Shearman for DFCU shareholder Arise, and Milbank for Rabo.
Jurisdiction of UK High Court to hear the matter
In July 2023, a UK three-judge Court of Appeal comprising Sir Julian Flaux, Lord Justice Popplewell and Lord Justice Phillips ruled that the case can be heard in a UK court given that there are serious issues to be tried concerning, among other matters, whether the commercial-activity and public-policy exceptions to the foreign act of state doctrine applied.
The Court of Appeal also ordered dfcu to pay £700,000 — then approximately UGX2.8 billion — in legal costs arising from the appeal.
The defendants attempted to take the jurisdiction dispute to Britain’s highest court, but on 20 December 2023, the UK Supreme Court refused permission to appeal, leaving the Court of Appeal ruling standing.
