Consequently, the circumstances justify criminal complaints being lodged against Crane bank Limited officers for causing financial loss and where the loans are linked to Dr. Ruperelia for embezzlement,” adds part of report.
A new and shocking forensic report which was made by an independent firm has pinned Dr. Shudir Ruperelia the former owner of Crane Bank to have advanced loan close to shs 500bn from Crane Bank to his own companies and latter write them off without following right procedures, we have exclusively and reliably been informed.
The report which this investigating website got a copy shows over 22 companies got loans and some of them were written off in an irregular way.
“Insider loans and a sample of written off loans with a view to establish the level of irregular and un-procidural lending arrangements that may have exposed the bank to a high level of non-performing loans,” part of the forensic report reads.
The report further states that loan were given out following internal credit policy, with insufficient security.
“We were giving out loans without following internal credit policy because we worked under the instructions of Bank’s managing Director who would be operating under instructions of Dr. Ruparelia,” revealed Crane Bank officers.
The Comprehensive reports further shows that many companies were created, applied for loans using shared securities and personal guarantees.
“Monies would be disbursed in a day or two, relevant documentation would be prepared after funds disbursement and many of these loans were dispersed to known business associates of Dr. Ruparelia,” Report adds.
The report further says that on 26 October 2016, loan amounting Ug shs 63.6bn was advanced to related companies out of which lending totaling to Ug shs 63.1bn (99%) was not disclosed as insider lending.
“The companies considered as insiders in delivering the amount mentioned above, there are allegations that Logic Real Estate and developers limited which had an outstanding loan balance of Ug shs 26.9bn is related to Dr. Ruparelia,” reveals the report.
The reports indicates that the company obtained loan on 23 December 2014 and the amount was deposited back into Crane Bank Limited “interest receivable” account labeled “personal FD”
It is also indicated that some of the borrowers appear to have used elaborate lying techniques to conceal the final destination of the borrowed funds and these include depositing proceeds in fixed deposits under different names and the letter of credit.
“In Some cases an overdraft would be approved alongside the loan and would be used to pay for interest via a standing order. The Over draft would be renewed and reviewed without additional security,” states the report.
The forensic report further says cases of securities being released and owners transferred with loans then subsequently written off.
The report further shows that some inside companies paid low interest rates compared to others “Maina Freight Limited an insider company was charged an effective interest of 7.88% on USD loan account number 1002023200000003 while other USD denominated loans in the period were charged between 11% and 13%,” part of the report adds.
The report further indicates that three entities all together make up 49% of all loans written off belonged to Dr. Ruperelia. The report further reviews various irregularities including premature of release of securities that left the bank exposed to unrecoverable loans.
“In all three cases reviewed, there was evidence to link loans to Dr Ruparelia either by him being an owner of part of the securities offered,” narrates the report. For instance in the case of Megabells Electronics, the land title was transferred to him.
The reports further indicates that Ssebaggala and sons Electro Center Limited or in case of Infinity Investments Limited, having his well known associates Mr. Mohammed Yoosuf as the director and his personal assistant Ms Valentine Ajay as the Company secretary.
The report says that Bank of Uganda can recover money from debtors or their securities are viable. BOU can also bring proceedings against shareholders and officers of the bank who were engaged in this unprofessional and reckless lending.
“Where evidence of fraud is clear, the corporate veil can be lifted to move against particular individuals and trace irregular obtained assets,” says report.
“Consequently, the circumstances justify criminal complaints being lodged against Crane bank Limited for causing financial loss and where the loans are liked to Dr. Ruperelia for embezzlement,” adds part of report.
Report also says criminal complaints can be lodged against borrowers, in case where it can be shown that credit applications were falsified for obtaining credit by false pretense.