LONDON— Do you know that in the Crane Bank versus Dfcu London trial, the parties have collected almost 11 million documents, reviewed over 250,000 for relevance, and the Defendants ultimately produced more than 17,000 to the Claimants during disclosure?
That single statistic, buried in the Defendants position, tells the story better than any submission from the bar. This is not a case that will turn on a smoking gun email or a surprise witness. It is a case that will turn on whether an English judge, sitting in the Commercial Court, can properly infer corruption from a documentary record that — on the Defendants' account — contains not a single document evidencing conspiracy, dishonesty or bribery.
As we promised in our opening update, Nile Post is providing periodic public-interest coverage of this 16-week trial without commenting on its merits. What shall follow is a factual account of the case in the weeks ahead, and the legal terrain the court must now navigate.
The Claimants' own admission
Perhaps the most striking feature of the Defendants' position is what it says the Claimants have already conceded.
The Claimants admit, at paragraph 2 of the Defendants' overview, that Dfcu had nothing to do with the alleged conspiracy between the Bank of Uganda and CEFC China Energy — the alleged scheme to sell Crane Bank to the Chinese conglomerate.
The Claimants' case is that when CEFC withdrew, the Defendants "stepped in" to buy Crane Bank's assets and liabilities at a gross undervalue, in return for turning a blind eye to the BoU's alleged wrongdoing.
That admission creates a structural difficulty. The alleged primary wrongdoer — the Bank of Uganda — is not a party to these proceedings. The Claimants do not contend that any Defendant was involved in any alleged wrongdoing by the BoU before Crane Bank was placed into statutory management on 20 October 2016.
On the Claimants' own case, the Defendants joined the alleged conspiracy only after the bank had already been placed under statutory management.
What the documents before Court show
The Defendants' factual narrative, stretching across over 100 paragraphs, sets out a chronology that is sharply at odds with the Claimants' framing.
- 2014–2016: The Bank of Uganda conducted annual on-site examinations of Crane Bank, each lasting about six weeks. The 2014 examination raised Crane Bank's overall risk rating from "Moderate" to "High," citing weak controls in credit underwriting and insider lending. The 2015 examination downgraded the CAMELS rating to "Marginal." By 1 July 2016, the BoU assessed Crane Bank's core capital as negative Shs16.10bn, with a core capital ratio of -1.28%.
- August 2016: Crane Bank signed a Memorandum of Understanding with the BoU in which it admitted it had "significant undercapitalization" and agreed to secure an injection of Shs88bn to restore capital adequacy by 31 October 2016.
- October 2016: Following a bank run, Crane Bank applied for emergency liquidity assistance of $115m. The BoU declined, offering instead Shs79.2bn secured by third-party collateral. On 20 October 2016, the BoU placed Crane Bank into statutory management.
- December 2016: DFCU submitted a bid on 20 December 2016 as part of what the Defendants describe as a competitive and urgent auction process. The Defendants say DFCU was not selected until 6 January 2017 — not three days after bidding, as the Claimants allege.
- January 2017: The P&A Agreement was signed on January 25, 2017. The BoU announced the transaction on January 27, 2017.
The PwC and KPMG distinction
Key to note in this case is that KPMG was relied upon for valuation and PwC for forensic findings. The submissions in court confirms this: KPMG assisted with the valuation of Crane Bank's assets and liabilities, while PwC produced the Inventories and Forensic Review Reports.
The Defendants also address the Claimants' allegation that PwC's work was unlawfully produced because PwC Ltd was not licensed to practise accountancy in Uganda.
The Defendants' Ugandan law expert, Mr Arnold Sekiwano, contends that preparing the PwC Forensic Review Reports did not constitute practising accountancy under s.34 of the Accountants Act, and that the BoU clearly had the power to commission a forensic investigation.
The Alleged 'red flags'
The Claimants' case relies heavily on alleged "red flags" from which they say the court should infer that DFCU was aware of wrongdoing by the BoU. The Defendants address each in turn.
On the alleged "sham" bidding process, the Defendants point to a contemporaneous email from Mr Willem Cramer, a Dfcu director, dated December 23, 2016, asking: "...am I right in sensing that we are the preferred bidder?"
The Defendants submit that this is hardly what would be asked by the knowing beneficiary of a sham process, but rather reflects a bidder realising it is in a good position after the bidding had concluded.
On the alleged "gross undervalue," the Defendants' AVQ expert concludes that the economic value of Crane Bank's assets and liabilities was negative as at each valuation date — meaning an acquirer would need to have been paid to take them on.
The Defendants also note that a "bargain purchase" of Shs119.3bn was recognised in Dfcu's 2017 financial statements but argue this is an accounting term of art that merely reflects the difference between fair value of assets acquired and consideration paid.
They point to the UBS acquisition of Credit Suisse in 2023, which resulted in negative goodwill of $27.8bn.
On the alleged Shs100bn bribery, the Defendants describe the allegation as "wholly implausible." They note that the portfolio allegedly comprised written-off loans — assets Crane Bank itself considered had no realisable value — and that the alleged arrangement was openly discussed in an Arise Supervisory Board presentation.
The Defendants ask rhetorically: "Bribes are not paid using apparently valueless assets, through traceable mechanisms and discussed in the open (let alone with large European state investment funds)."
The foreign act of state question
The Defendants devote considerable space to the foreign act of state doctrine, which we flagged in our opening article as the case's central legal uncertainty.
The Defendants argue that the Claimants' claim cannot succeed without the court first finding that the Bank of Uganda acted wrongfully — and that under the foreign act of state doctrine, the English court has no jurisdiction to adjudicate on the legality of a foreign state entity's executive acts performed within its own territory.
The Court of Appeal in 2023 allowed the case to proceed by finding the doctrine did not bar the claims at the jurisdictional stage but left the question to be decided at trial with full evidence.
The weeks are long,we are heading to week 2 out of 16,the Claimants will assert otherwise while the Defendants will invite the trial judge to find that the entirety of the BoU's alleged conduct — both before and including entry into the Transaction — is subject to the doctrine.
The Claimants argue that the BoU's entry into the P&A Agreement was a commercial act, not a sovereign one. The Defendants counter that the BoU was exercising statutory powers of sale subject to public welfare considerations, not commercial ones.
What to watch in the coming weeks
Witness evidence is expected to begin in the days and weeks ahead. The Claimants have lined up a number of witnesses, and the Defendants intend to call 19 witnesses, including each of the individual director defendants.
They also intend to call two current partners within the PwC global network, Mr Thoithi and Mr Mpobusingye, to address the Claimants' allegations about PwC's engagement.
Expert evidence will be heard on central bank practice, accountancy and valuation, and Ugandan law.
The trial continues.
Nile Post will be here, we have eyes and ears on the case with on ground echoes in the spirit of public interest as the trial progresses, without commenting on the merits of either party's case, in recognition of the sub judice principle. The final determination rests with the court.