The Supreme Court of the United Kingdom has blocked DFCU Bank’s attempt to sidestep the prosecution of its top bosses in a case where they are accused of fraudulently transacting in Crane Bank’s assets in collusion with officials of the Bank of Uganda. The decision potentially sets new precedents in regard to holding Government officials, as well as company directors personally liable for the illegal actions of their organisations even when operating in overseas markets. Back in October last year, DFCU suffered a legal setback when the Uganda High Court ruled that Meera Investments Limited was the rightful owner of the 48 leases that Bank of Uganda had illegally sold to DFCU Bank when it liquidated Crane Bank in 2016.
Given that DFCU was indemnified by Bank of Uganda in the purchase agreement, it meant that it would be the long-suffering Ugandan taxpayer to shoulder the burden of the hefty costs, damages and compensation to tycoon Sudhir Rupalelia. The legal battle then shifted to the UK, where DFCU raised a jurisdiction challenge. But in a terse judgment issued on January 8, the Supreme Court of the United Kingdom rejected DFCU’s argument that UK courts had no jurisdiction over a matter involving the Government of Uganda and ruled that DFCU’s top bosses and several BoU chiefs must stand trial for their role in the impugned transaction. The DFCU chiefs, including three Ugandans – Mr. Jimmy Mugerwa, Mr. Juma Kisaame, and Mr William Sekabembe – as well as BoU officials at the centre of the transaction, have now been ordered to file their defences within 21 days. The precedent potentially puts Ugandan company directors and Government officials at the risk of being prosecuted personally for any future breaches of the law while transacting on the behalf of their respective organisations. Founded in 1964 as a development finance institution, DFCU boasts of total assets worth UGX3.2 trillion and is listed on the Uganda Securities Exchange in 2004. Arise BV of Netherlands are the majority stakeholder (58.7%), while NSSF enjoys a 7.46% shareholding in DFCU.
