Court has dismissed with costs a case in which businessman Amos Nzeyi had accused Bank of Uganda (BOU) of illegal closure of the National Bank of Commerce (NBC).

Nzeyi co-owned NBC with former premier, Amama Mbabazi and Prime Minister Dr Ruhakana Rugunda.

In 2017, Nzeyi sued BOU jointly with Crane Bank (in receivership), its former proprietor Sudhir Ruparelia and his partner Rasiklal Chhotalal Kantaria. Nzeyi later added on dfcu Bank which took over Crane Bank.

Justice Steven Mubiru of the Commercial Division of the High Court dismissed the case citing failure of the complainant to present evidence.

He reasoned that failure of the plaintiffs (Nzeyi) to turn up in Court was not sufficiently explained by the lawyers.

“…Under Order 9 Rule 22 of the Civil Procedure rules, where the defendant (accused) appears and the plaintiffs (accuser) do not appear, When the suit is called for hearing, the court is empowered to make an order that the suit be dismissed unless the defendant admits the claim,” Justice Mubiru reasoned.

The judge explained that: “Under Order 17 rule 4 of the Civil Procedure rules, where any party to the suit to whom time has been granted fails to produce his or her evidence or to cause the attendance of his or her Witnesses or to perform any other act necessary to further progress of the suit, for which time has been allowed, the court may notwithstanding that default, proceed to decide the suit immediately.”

According to the ruling, the case has been on court records since 2017 and when the case file was called to start hearing, the complainant failed to come to court to present their evidence.

In the suit, Nzeyi had claimed that the Central Bank’s decision to take over and sell NBC’s assets to Crane Bank within six hours on September 27, 2012 was in breach of the Financial Institutions Act 2004.

Nzeyi claimed that he decided to go to court upon learning that BOU sued Sudhir and his Meera Investments seeking to recover over UGX397 billion.

Nzeyi contended that after the closure of NBC by BoU, an injunction was issued by the Constitutional court on September 28, 2012 restraining the Central Bank and its agents from taking further steps to wind up, liquidate and sell NBC. Nzeyi says the Constitutional court order was ignored by both BOU and Crane Bank and all attempts to hear the main constitutional petition have since proven futile for the last five years.

Between September 29, 2012 and October 1, 2012, Nzeyi says BOU officials who included Ben Sekabira and Godfrey Yiga forcefully took over securities (money) from NBC well aware of the Constitutional court injunction. On October 1, 2012, Justine Bagyenda, BOU’s executive director, supervision, participated in the sale of some of NBC’s foreign currency deposits worth UGX 2 billion whilst she was aware of the said court order.

Nzeyi also argued that though NBC was summarily closed without being accorded any financial support, yet it has been reported that BOU had intervened in Crane Bank’s situation with a cash injection of nearly UGX 400bn of public funds.

“That the plaintiffs, therefore, take strong exception to the double standards and discrimination exhibited by the first defendant [BOU] against NBC which was unjustly and illegally put to sudden death,” the plaint goes on.

Subsequently, Nzeyi wanted the Commercial court to declare that the takeover, closure and sale of NBC assets to Crane Bank was in bad faith and in breach of Uganda’s financial laws.

“A declaration that the purported winding up and liquidation of NBC by the first defendant [BOU] was irregular, illegal, null and void,” Nzeyi prayed to court.

Interviewed yesterday for this story, lawyer Peter Walubiri said the case by NBC confirms that so far BOU is on trial for failing in its supervisory role.

“The best-case scenario for BOU would have been for the case with Sudhir to be settled out of court,” Walubiri said, adding, “But now they have failed to settle out of court; it’s time for the public to know who did what.”

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