The Observer | Bank of Uganda ‘unaware’ of Crane Bank Sale
Bank of Uganda (BOU) is yet to receive official communication on the proposed move to sell shares in Crane bank.Christine Alupo, director for communications BOU, says the central bank has not received any request from Crane bank to approve change in shareholding.
Sudhir Ruparelia, the proprietor of Crane Bank has confirmed that he is in talks with what he calls a “strategic partner” to acquire stakes in the bank. In a statement issued on Friday last week, Crane bank said they had initially wanted to float shares on the stock market but now want private equity instead.
Ideally, the bank said, they are looking for a partner with regional or continental footing. Media reports have suggested that the potential Crane bank partners are South African, although other sources also suggest they may be Ethiopian. Details on the “strategic partner” are not public yet. An entity who did due diligence for an interested party in the Crane bank shares acquisition declined to divulge any details citing confidentiality.
Alupo, in a statement posted on BoU’s website and facebook page, says the Financial Institutions Act 2004 (FIA 2004) as amended in 2016, stipulates that if a commercial bank wishes to dispose of equity worth five percent or more of its shares, the sale must be approved by Bank of Uganda.
Alupo adds that the BOU has not yet received any request from Crane bank, adding that “should such a request be received, the proposed shareholders will be vetted for ‘fit and proper’ credentials and positively considered if they warrant approval”.
According to Alupo, it is normal practice for financial institutions to change shareholding in line with their strategic objectives, and this has happened several times in Uganda.
Crane bank is one of the few Ugandan indigenous banks and one of 25 commercial banks licensed and supervised by BOU. It has one of the largest footprints in the country, with well-built bank buildings in several urban centers. When we visited a few branches in and around Kampala, operations were going on normally.
A staff at the Crane Bank headquarters in Kampala, who declined to be named, said they are not worried because the deal is aimed at capitalizing the bank. Crane bank last year made losses, owing to the spiriting away of more than $18m, equivalent to about Shs 50bn by its former managing director A. R. Kalani.
Source — The Weekly Observer