The Committee on Statutory Authorities and State Enterprises-COSASE has faulted Bank of Uganda for having sold assets belonging to three defunct banks to a buyer(Nile River Acquisition-based in Mauritius) basing on the British Law instead of the Ugandan law.
The banks were Greenland Bank, International Credit Bank and Cooperative Bank.
Chairperson Abdu Katuntu tasked the legal counsel Margaret Kasule to explain but her response ,alluding to time constraints, did not satisfy the members.
‘Choice of the law is actually permissible but there should be a reason for it. Why did you oust our laws in a transaction of this nature’ unless there is a compelling reason from Bank of Uganda? he asked.
Members who by this time were all flooding questions to the legal counsel expressed disappointment in the institution, wondering as to why assets including secured loans, non-performing loans and poorly performing loans amounting to US $5.25million were sold to an off-shore company,yet the assets were located in Uganda.
According to Margaret Kaggwa Kasule ’’The liquidation process had taken a very long time and we had devoted a long time to the conclusion of the exit strategy almost a year to this transaction, we go ahead and get a buy who insists he needs a neutral law to apply to the transaction.’’
Margaret added that they would have abandoned the transaction after two years of planning but that act would not be prudent. She noted that the law of limitation was running against the loans.
But Katuntu wondered,"I asked you a question here yesterday, does this thing run in perpetuity and three of you people nodded in agreement.
In further interrogation Katuntu asked,"This process that identifies a buyer,was there an opportunity,can you give us evidence that actually you had looked for several buyers for this portfolio?’’
‘’That will be for the procurement department to answer’’,Kasule responded
Meantime,members cautioned Former Bank of Uganda Executive Director in charge of Bank Supervision, Justine Bagyenda to desist from using her retirement as an excuse for not contributing to the on-going probe in the controversial closure of the seven commercial banks.
This as she appeared for the very first time and was no longer an employee of the bank.
She was told to liaise with her former colleagues and bring all documentation pertaining to the sale of the banks and their assets as she held influential positions at that time.
The committee also demanded for the evidence of Mr.Bernard Ssekabira’s appointment letter, who was the then liquidator.