NBC had paid up capital of about sh10b and required a fresh injection of capital which it failed to raise before its closure and takeover by the embattled Crane Bank.
The Constitutional Court in Kampala issued notices to the Attorney General, Bank of Uganda, Crane Bank Ltd. and others on a petition that questioned the the liquidation of National Bank of Commerce pending a court suit against the Central Bank.
Petitioners (shareholders) in their petition assailed Bank of Uganda’s move to sell Sudhir Ruperalia’s Crane Bank whose administration was equally taken over by the Central Bank in October on grounds that it was a “significantly undercapitalized institution as defined by law.”
In September 2012, Crane Bank took over National Bank of Commerce after its licence was revoked by BoU. The central bank initially placed NBC under statutory management; a day later, it said it had cancelled the bank’s licence and told depositors to operate their accounts in Crane Bank that was also last month taken over as well.
The counsel of the petitioners M/S Twinobusingye Severino & Co Advocates submitted in the petition that the valuation of assets of NBS stuck in the embattled bank was about $200m (about sh680b).
The petitioners also submitted that they have in their possession court orders to stay the liquidation of NBC pending a court suit against Bank of Uganda.
They questioned as why so-called clean respondents committed acts of contempt of court has not been disposed of either.
The counsel mentioned in the petition that their first petition which were filed way back on the 28TH September 2012, but have not been heard for more than four years now.
The court was prayed to declare the Bank of Uganda breached the Financial Institutions Act (FIA) as provided for in the Constitution and acted in bad faith and in an abuse of its powers.
The NBC was formed in 1991. In 2009 it was the 22nd biggest bank out of 23 then with an estimated combined asset base of about 50 billion shillings.
ALSO READ: EXCLUSIVE: How Sudhir begged Museveni for Shs200 billion Crane Bank bailout
NBC’s troubles
The closure of the National Bank of Commerce in 2012 came against the backdrop of ownership disputes between the few majority shareholders who own 86 percent of the bank and 320 other shareholders who own just 14 percent.
The majority shareholders are former presidential candidate Amama Mbabazi, Crown Beverages chairman Amos Nzeyi, and Prime Minister Dr. Ruhakana Rugunda.
The minority shareholders, who include former Supreme Court Judge George Kanyeihamba and former health minister Jim Muhwezi, contended that the bank’s name was changed from Kigezi Bank of Commerce to National Bank of Commerce without their consent.
But they lost a bid to stop the majority shareholders from selling shares or carrying out any other transactions.
