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{UAH} Six tycoons probed over Shs244b Crane Bank loans

Six tycoons probed over Shs244b Crane Bank loans

Former Crane Bank owner and b

Former Crane Bank owner and businessman Sudhir Ruparelia. FILE PHOTO 

By Othman Semakula

Kampala- Crane Bank suspiciously advanced more than Shs244b in separate loan amounts to companies owned by six tycoons, a preliminary forensic audit report conducted by PricewaterhouseCoopers shows.

The report, code-named Project Nyonyi, names the six individuals as Ms Amina Hersi Moghe , John Bosco Muwonge (Boost), and one of Kampala's largest land owners, Mr Ali Mohammed and Mr Yoosuf Mohamed, close associates of Sudhir Ruparelia and Mr Leonard Bob Kanaabi and Mr Innocent Mutabaruka. Ms Moghe owns Oasis Mall and the upmarket apartments, Laburnam Courts in Kampala, and she is setting up a sugar plantation in northern Uganda. 
The report says Mr Kanaabi, who is a listed shareholder in Logic Real Estates and Developers Limited that was advanced huge sums of money in loans, is an employee of Mr Ephraim Ntaganda, a business associate of Mr Ruparelia. 
The six are some of the 22 top borrowers that as of October 31, 2016 held more than Shs500.3b in Crane Bank loans, making up 45 per cent of the bank's outstanding credit facilities.

Largest debtor
Ms Moghe is listed as the largest debtor, holding more than Shs111b in unpaid loans that were continuously advanced even when, the report says, Crane Bank had clear indication the she could not repay them.
The report observed that the loans advanced to Ms Moghe pointed to a number of possible irregularities, such as forming companies and documents generated for the sole purpose of obtaining loans and concealing the real identity of the beneficiary of the funds.
For instance, two of Ms Moghe's companies - Minutan and Aureco – that were loaned money, had been incorporated only days before they applied for the loans and disbursements made. 
Minutan was incorporated six days before disbursement of the loan, while Aureco had been in existence for only eight days when it got the money.

The forensic investigation was requested by Bank of Uganda after taking over the operations of Crane Bank in October 2016. Crane Bank's assets were handed over to dfcu Bank.

Questionable destination
Ms Moghe is also suspected to have been a front for a number of companies that benefited or relied on her letters of guarantee to be advanced loans with a questionable final destination.
Therefore, the report advised, Bank of Uganda should "establish the ultimate destination of the disbursed amounts as there is evidence of elaborate layering transactions that appear to be aimed at concealing the final destination of the funds". 
Layering is classified as the second stage of money laundering through which attempts are made to distance the money from its illegal source.

At least 18 of the 22 companies investigated, the report indicates, had their trading accounts permanently in debit resulting from long outstanding overdraft facilities, which, although they were short term, were repeatedly renewed with no clear explanation.
Mr Ali Mohammed and Mr Yoosuf Mohamed, who are listed as signatories on a number of Mr Ruparelia's family and Ruparelia Group bank accounts, had an outstanding loan balance of more than Shs56.6b advanced to Premier Commodities, Maina Freight and Sunbury Investments. 
The two, the report indicates, owned companies that are suspected to have been fronted by Mr Ruparelia with the view of defrauding Crane Bank.

Mr Muwonge holds a loan that runs in excess of Shs50b, while Logic Real Estates and Developers Limited, owned by Mr Kanaabi and Mr Mutabaruka, has a loan balance of Shs26b.
The six individuals are suspected to have been involved in the fraudulent acquisition of loans from Crane Bank and therefore the report recommends that they be investigated to ascertain the final destination of the borrowed funds with the view of facilitating recovery of the same money.

Take over
In October last year, Bank of Uganda took over Crane Bank after it was found that the bank was significantly undercapitalised.

The report prominently mentions Mr A R Kalan, the Crane Bank former managing director, as having assisted most of the fraudulent loan advances with suspected connivance of the board whose members, according to details of the report are being investigated with the view of prosecuting them.
The 12 individuals and entities, alongside Mr Ruparelia face a range of charges over alleged mismanagement and fraud in the defunct Crane Bank 
Mr Kalan, who allegedly fled the country in 2014, is among the 12 members of the board under investigations.
Details of the report indicate that the loans were mostly approved by individuals without the authorisation of the bank's loan committee and required approval with accordance to the law. 
It is also reported that some loans were advanced without evaluation of customer's credit worthiness and sufficient securities as well as disbursing loans on securities that had already been submitted to other banks.
Our attempts to reach the named individuals were futile by press time.


Gwokto La'Kitgum
"Even a small dog can piss on a tall building" Jim Hightower

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