The unraveling banking scandal which pits Bank of Uganda against the country’s wealthiest businessman Sudhir Ruparelia continues to draw mixed sentiments.
When it emerged last week that the Central Bank was suing the property magnate to force him to repay over Shs. 400billion he allegedly extracted fraudulently from his own Crane Bank leading to its collapse, many Ugandans strongly condemned Mr Sudhir and chorused praises for the Central Bank’s whistle-blowing job well done.
Sudhir is being accused by Bank of Uganda of “fraudulently extracting” $94Million and Shs. 60billion from Crane Bank, leading its solvency and takeover by the BoU early this year. They want him to be compelled to return all this money.
However, stronger accusations are now emerging against Bank of Uganda that it failed on its supervision duties.
Andrew Mwenda, a journalist and political-economic analyst is one such critic of the Central Bank and wonders, what it was doing when the alleged fraud was taking place at Crane Bank over a period of 14 years.
“We are citizens of Uganda,” said Mwenda. “We pay the Central bank to do its work. We don’t get to hold Sudhir to account. We hired somebody to do that.”
The Central Bank, Mwenda claims, is trying to use emotions; and Sudhir’s alleged mistakes to “disguise their utter failure to perform the basic function of bank supervision.”
Mwenda, who calls himself a close friend of Sudhir, is also accusing Bank of Uganda of targeting the tycoon, “just because he is Ugandan.”
Majority of the other foreign based Banks, he claims, would easily get away with similar crimes, because BoU wouldn’t have a way of seizing their properties because they never invest in Uganda.
“The Central Bank is pursuing Sudhir because he is Ugandan,” said Mwenda while appearing on NBS on Thursday.
“All his investments, every coin he has made from Crane Bank he invested it in Uganda. He has over 300 properties in Kampala.”
“Standard Chartered has been in Uganda for 115 years, and they haven’t set up a single kiosk.
“Instead of helping local banks that make money and invested in the economy, you are helping foreign banks which have nothing here except desks and computers.”
Citing examples from the American Recession a decade ago, where some banks had liabilities as high as 3000% their assets, but were rescued by the US Federal Reserve, Andrew Mwenda wants the same treatment for Mr Sudhir.
He said, “Sudhir built a $2billion empire because he understood how Uganda works. It is better that we forgive his mistakes because, if you get the cost and weigh it against the benefits of having Crane Bank, the benefits are too big. We should be helping Sudhir build more businesses that will help Ugandans.”
He further pointed out that large businesses in Uganda have failed because they lacked the same support that government gives foreign businesses.
He cited the ongoing works on big infrastructure projects which are all contracted to foreign companies, “because we killed all our local companies.”
Bank of Uganda remains unwilling to discuss the matter, saying the matter is before the Commercial Court in Kampala.