DFCU Bank had an asset and liability takeover of Crane bank in 2017. Due to this, shareholders of former Crane Bank Limited (CBL) have filed a claim in the English High Court.
DFCU Bank is a subsidiary of DFCU Limited. The majority shareholder in DFCU, Arise BV, is co-owned by Norfund, a Netherlands Development Finance Company.
Under Rule 36 of the Uganda Securities Exchange Listing Rules, 2021, it’s a requirement the listed companies to release details of an event. Such an event could be one that might have a material effect on the financial results in the long run.
DFCU limited sent a notice to Uganda Securities Exchange.
In the notice, they announced that they (DFCU) advise their shareholders and the public that against them has been issued in the English High Court.
‘’The claim has been brought by certain shareholders of Crane Bank Limited (CBL) and in the name of CBL which is in liquidation as per Bank of Uganda notice dated 13th November 2020. The claim relates to the transaction in which DFCU Bank acquired some assets and assumed some liabilities of CBL (then in Receivership) from Bank of Uganda (acting as Receiver of CBL) following the placement of CBL under Receivership in 2017,’’ the notice read in part.
DFCU Bank took over CBL in January of 2017 from the management of Bank of Uganda. This is because Crane’s liabilities had exceeded their assets. The acquisition included all customer deposit accounts as well as some loan accounts.
Last week, the Supreme Court dismissed an application in which the Bank of Uganda sought permission to amend the memorandum and record of appeal. They had to do this before the hearing of the appeal.
Bank of Uganda wanted to substitute Crane Bank Limited (in receivership) with CBL (in liquidation). They wanted to do this saying under the law, the two entities can never be the same. They can also never enjoy the same status.
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