Uganda: Bou Pays Sudhir Shs280m for Closed Forex Bureaus

Kampala — Bank of Uganda (BoU) has paid Mr Sudhir Ruparelia about Shs300m to partially resolve a case the property mogul filed against the central bank for non-refund of licence fees following the closure of four of his forex bureaus about two years ago.

A partial consent judgment at the Commercial Court stated that BoU officials accepted to pay Mr Ruparelia in 21 days from the date of the consent judgment.

The BoU Deputy Governor, Dr Louis Kasekende, and Mr Ruparelia signed the consent judgment on December 19, 2018, but the court received the document in January.

Daily Monitor understands that about Shs277.8m has since been paid to Mr Ruparelia in a lumpsum.

The four forex bureaus were closed in 2017 by BoU for allegedly not being "fit" and not being "probity" [lacking integrity].

They are Crane Forex Bureau (Speke Hotel), Crane Forex Bureau (Kampala Road), StanHope Forex Bureau De Change and Red Fox Bureau De Change.

Part of the "fitness" and "probity" test of the bank requires that the director/s of the forex bureaus in question is/are not under any investigation or has/have not prevailed over a bank that was sent into receivership.

"By consent of parties hereto, it's hereby agreed that this suit be and it's hereby partially settled as hereunder," the consent judgment reads in part. "The defendant (BoU) do release to the plaintiff (closed four forex bureaus belonging to Mr Ruparelia) within a period of 21 days from the date of sealing by court of this partial consent judgment the security deposits held by it," the judgement adds.

Upon receiving the money, Mr Ruparelia reportedly instructed his lawyers, Magna Advocates, to remove the demand for refund from the case against the central bank and only maintain the part where he is seeking damages for loss of business due to the closure of his forex bureaus.

In the judgment, BoU and Mr Ruparelia agreed that the claim for exemplary damages, interest and costs would be determined in a trial by court.


"The question as to the plaintiffs' claim for general and exemplary damages, interest and costs of the suit be set down for trial," the judgment reads.

In the suit against BoU, Mr Ruparelia had asked for a refund of more than Shs283m, which he claimed was the money being indefinitely withheld illegally by the central bank. In the partial consent judgment, BoU agreed to pay Shs277.8m.

When this newspaper contacted Mr Kelvin Kiyingi, the BoU acting communications officer, at the weekend, he said he needed time to contact the legal department to confirm whether the said money had been paid to Mr Ruparelia.

The conflict involving the property mogul's forex bureaus and BoU started in 2016 when the central bank Governor, Mr Emmaneul Tumusiime-Mutebile, wrote to Mr Ruparelia.

Financial woes

Mr Mutebile notified Mr Ruparelia that BoU would not renew the annual licence of the four forex bureaus, which had expired on December 31, 2016.

At that time Mr Ruparelia's Crane Bank had been closed because its financial position had become unsustainable.

"With reference to your letter dated December 9, 2016 on the above subject, I wish to advise as follows; in accordance with regulations 9 (1) c and f and regulation 13 of the Foreign Exchange (Forex Bureau and Money Remittance) Regulation 2006, your application for renewal of the Forex Bureau licence for Crane Forex Bureau has been declined," Mr Mutebile wrote to Mr Ruparelia.

Mr Mutebile also warned that the laws of Uganda do not permit anyone to operate a forex bureau without a licence.

Mr Ruparelia wrote back asking BoU for refund of the licence fees that he had already paid but the central bank refused. Mr Ruparelia petitioned court in October 2017 seeking redress.

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