News coming in to Daily Inspector show that DFCU bank is to close 22 branches countrywide.
We have learnt that the branches to be closed are those that are being housed in buildings owned by City businessman Sudhir Ruparelia.
Daily Inspector has been told that the embattled DFCU bank finally agreed to vacate all buildings that are owned by Meera Investments and Crane Management services.
According to the document that we have seen, DFCU Bank has already opened bids for companies that want to provide consultancy services during the relocation of its 22 branches in different regions around Uganda.
It should be remembered that when Crane bank was declared bankrupt, DFCU harried and fraudulently took it over. The bank also took over all assets that belonged to Crane Bank and little did they know that the buildings in which Crane bank used to operate in weren’t part of the financial institutions.
DFCU did not know that Meera Investments and Crane Management Services actually owned these buildings.
At one time, DFCU bank was misguided by Sebalu & Lule Advocates to transfer the titles of these properties to DFCU bank. What we can confirm is that though these titles were leased to Crane Bank, they actually belonged to other companies.
Daily Inspector has been told that Meera leased 46 properties to Crane Bank on different terms and the leases were registered as encumbrances on Meera’s freehold and mailo interest.
These lease titles were subsequently processed and issued to Crane Bank.
Crane Bank agreed to pay US$6,000 as ground rent for each of the properties effective on or before the January 1, of every year to the property owners who in this case are Meera Investments.
The lease agreements and the court documents provided that Meera had the option to review the ground rent after the expiry of three years.
Meera had also agreed with Crane Bank under various lease agreements that in case of any breach, non-performance, or non-observance of what they had agreed on in the lease agreements, it will be lawful for Meera to seek legal redress from court.
“It was further agreed between the plaintiff [Lessor] and Crane Bank [Lessee] that anything done contrary to the terms of the lease agreements would forthwith cease the lessee’s rights or interest in the suit properties without prejudice to the lessor’s entitlement to rent unpaid and due,” Meera claims.
2017 Bank of Uganda announced that it had transferred all the assets and liabilities of the bank to dfcu Bank.But this was an illegality where top officials of BoU are said to have benefited financially.
dfcu Bank, which was the new tenant then moved to take over the 46 properties, without the consent of the owners Meera Investments.
“Through a subsequent search at the relevant land registries, the plaintiff (Meera Investments) discovered that; without it’s prior written consent, the first defendant (dfcu), in addition to taking possession of the suit properties, caused the leasehold interest to be transferred into its names and had been registered thereon as the proprietor of the leasehold interest,” Meera Investments sais in their plaint of recovering rent and properties.
They argued that at the execution of the transfers in favour of dfcu and at the time of causing the transfer of the leasehold interest into the names of dfcu, the registration of Meera as the proprietor of the freehold and mailo was and is still intact.
Meera argued that dfcu Bank was aware of this fact or could have ascertained by way of a simple search.
The company also at the time faulted the commissioner land registration for fraudulently going ahead to transfer the leases of the properties to Dfcu without the prior consent of the owners.
“The plaintiff avers that the second defendant (commissioner land registration), [was] well aware of the existing lease agreements and the conditions therein including the requirements for obtaining prior written consent from the plaintiff as the lessor, before any transfer of the leases and parting with possession thereof, nonetheless proceeded to illegally transfer and register the first defendant as lessee of the suit properties, without any consent or authorisation from the plaintiff as required under the various lease agreements,” it argued.
Sebalu & Lule Advocates, claimed Sudhir fraudulently transferred freehold titles of 48 plots of land (where the bank has its branches), purchased and developed using the bank’s finances into the names of Meera Investments from Crane bank.
The plots, according to the court documents, were then reportedly leased to the owner (Crane bank) at UGX100 million premium for 49 years and $6,000 in ground rent per year payable to Meera Investments.
Sudhir has since dismissed the allegations as “presumptuous, speculative and founded on fanciful reasoning.”
He said they do not reflect the market realities of obtaining leasehold titles in Uganda
According to Sudhir, BOU’s allegation that Crane Bank obtained over 14 freehold titles is false since the bank is a “non- citizen,” thus couldn’t hold the land as a freehold owner as stipulated by the Land Act.
As part of Crane Bank’s expansion plan, Sudhir argued, the bank acquired a number of leases with different tenure, some of which were to last just seven years with a commercial view that it was better in the long run to obtain freehold titles in lieu of the said leases.
He added that after Crane bank obtained over 14 freehold titles, it was considered that pursuant to the Land Act, the bank could not hold the land as a freehold owner since it was a non-citizen within the meaning of the Land Act.
Meera has previously asked court to declare that the continued presence of dfcu Bank on its properties amounts to trespass and that they should be ordered to vacate with immediate effect.
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