Representatives of Dfcu Bank’s European shareholders recently jetted into Uganda on a fact-finding mission in regard to the suit filed against the financial institution by Meera Investments.
Owned by businessman Sudhir Ruparelia, Meera Investments has since dragged Dfcu Bank to Land Division of the High Court, seeking to reclaim its 46 branches that were allegedly acquired illegally following the dissolution of Crane Bank.
The branches are located in Rukungiri, Kasese, Busia, Kawempe, Nkumba, Entebbe, Kireka, Nabingo, Masaka, Jinja, Gulu, Mukono, Ntinda, Mengo, Iganga, Malaba, Hoima and Kamwenge.
Other branches are situated in Kabale, Ibanda, Rushere, Mbarara, Kabarole, Soroti, Kawempe, Bugolobi, Nateete, Masindi, Mulago, Nakulabye and Bushenyi.
In case court agrees with the submissions of Meera Investments, all the 46 countrywide Dfcu Bank branches worth millions of dollars will be closed and reverted to them, leaving the bank without premises to run the countrywide branches.
Impeccable sources say representatives of foreign shareholders visited Uganda where they held key meetings with a reputable international law firm on the Meera case.
“The Dfcu shareholders wanted to find out if there was any chance of winning the case,” said an insider who preferred anonymity so as to speak freely.
“They also intended to assess the impact of proceeding with the litigation process.”
Dfcu bank shareholders are; Arise BV (majority shareholder with 58.71% ownership), CDC Group of the United Kingdom (9.97%), National Social Security Fund (Uganda)-7.69%, Kimberlite Frontier Africa Naster Fund (6.15%), SSB-Conrad N. Hilton Foundation (0.98%), , Vanderbilt University (0.87%), Blakeney Management (0.63%), Bank of Uganda Staff Retirement Benefits Scheme (0.59%), Retail investors (11.19%) and two undisclosed Institutional Investors (3.22%).
It emerged that the Dfcu shareholders were informed by top legal brains that Dfcu stood a high chance of losing the case and should therefore find a better way of resolving the dispute.
Meera Investments contends for any transfer of the branches to have been effected to Dfcu Bank; its consent should have first been sought since it’s the “current registered proprietor of the freehold and Mailo interests in the land.”
Meera Investments further states in its lawsuit that at the time Bank of Uganda (BoU) took over the management of then Crane Bank in October 2016 (before its eventual sale to Dfcu), it was the lessee of the suit properties and was already paying $6,000 as monthly rent to it (Meera Investments) every beginning of the year.
Meera adds that transferring the same properties to Dfcu Bank without their prior written consent was illegal.
In its defence, Dfcu argued that the “transfer and handing over of possession of the 48 leasehold certificates of Titles was effected by Bank of Uganda under regulatory and intervention powers granted to it by the statute specifically Sections 95(1) (b) and (c) of the Financial Institutions Act (FIA) and accordingly not having been a transfer by Crane Bank, the contractual covenants in the lease agreements relating to transfer of the leases or parting with possession of the leased land didn’t apply.”
Dfcu also held that it’s the “registered proprietor of each of the 48 leasehold certificates of title and a bonafide purchaser thereof of value and its title and proprietorship is protected as such in the absence of any fraud on its part in relation to its registration.”
Upon review of Meera Investments’ grounds of the case with an independent law firm, Dfcu’s foreign shareholders reportedly advised the Bank’s Managing Director Juma Kisaame to settle the matter out of court.
“An amicable settlement was agreed as the best option in this matter. Kisaame will have to engage Meera Investments on the same,” an official told ChimpReports on Wednesday.
This would end an impasse that threatens the occupancy of Dfcu branches across the country.
In its legal action, Meera Investments wants Court to declare that the “continued presence of Dfcu Bank on its properties, amounts to trespass” and that the bank should be ordered to “vacate with immediate effect.”