Retired Supreme Court judge George Kanyeihamba has lost a case in which he had sued Prime Minister Amama Mbabazi, Health Minister Ruhakana Rugunda and businessman Amos Nzeyi for fraudulently changing the Kigezi Bank of Commerce into the National Bank of Commerce without approval of the minority shareholders.
The retired judge along with 320 individuals from the Kigezi region had accused Mbabazi and his group for having conspired and fraudulently constituted National Bank of Commerce to which they transferred the business and assets of Kigezi Bank of Commerce.
They had claimed that the change of the bank name was fraudulent, dishonest and illegal, a move calculated to benefit Mbabazi and his group.
Amama Mbabazi, Ruhakana Rugunda and Amos Nzeyi are the majority shareholders in the National Bank of Commerce with a combined shareholding of about 86 percent while the other 320 shareholders – who included Kanyeihamba, former health minister Jim Muhwezi and former Finance minister Ezra Suruma – own 14 per cent of the shares.
Kanyeihamba and his group had prayed to court to grant them several orders including; that purported transformation of Kigezi bank of Commerce into National Bank of Commerce was fraudulent, ineffectual and a nullity, that the sale and distribution of the shares after the creation of the National Bank of Commerce were done in disregard of the memorandum of articles and association and were therefore fraudulent, illegal and void.
Kanyeihamba had also prayed to court to direct the Mbabazi and his group to jointly and severally render a true account of the profits of Kigezi Bank of Commerce and its assets since 12 April 1997. He also wanted court to declare National Bank of Commerce as not legally in place.
But the head of the Commercial Court justice David K. Wangutsi held that Kanyeihamba and group failed to prove that the change of name was fraudulent or unlawfully done.
In the ruling, Justice Wangutsi explained that everything leading to the change of the bank’s name was done in full support of the general meetings which Kanyeihamba himself attended.
Further, the judge explained that procedure fulfilled all the legal requirements under the supervision of the central bank.
The bank in question was formed in 1991 to provide banking services and inexpensive loans to the people in the south-western region of Kigezi. Its license was revoked by the central bank in 2012 on grounds that its “activities were detrimental to the interests of its depositors”.
Its clients were then transferred to Crane Bank.