BOU disclosed the financial status of global trust bank to DFCU bank with consent

By Alice Lubwama

The parliamentary committee on commissions statutory authorities and state enterprises has discovered that bank of Uganda revealed the financial status of Global trust bank with out its consent to DFCU bank before it was closed some thing centrally to the law.

Last week the committee directed the former executive director in charge of supervision Justine Bagyenda to produce all the documents concerning the sell of global trust bank after learning that the bank was sold on the same day it was closed.

The committee also discovered that bank of Uganda had in-fact closed and sold off global trust bank on the same day.

But on looking at the documents, the committee discovered that bank of Uganda entered a purchase agreement with DFCU on July 10th 2014 before Global trust bank was finally closed on 25th July 2014 which made the committee believe that they never managed the bank for a minimum of six months as required by the law.

The committee question ed Justine Bagyenda on the intention and purpose of the disclosure to which Bagyenda first said was a collective decision of the bank but the governor bank of Uganda Emmanuel Mutebile denied.

Mutebile said he was not aware of this decision to disclose the information of global trust bank to a competitor and this was confirmed by secretary board Susan Kanyemibwa.

The committee is looking at the legal closure of seven commercial banks.

BOU security officials further remanded to Luzira


By Sania Babirye

Two security officials from Bank of Uganda who are charged with neglecting their duties have further been remanded to Luzira prison.

Charles Mollo has appeared before City hall court grade one magistrate Beatrice Kainza while Beatrice Kyambade appeared before city hall court grade one magistrate Patrick Talisuna.

They had appeared in hopes of being granted bail today. Though state had no objection to their bail applications, the respective magistrates remanded both of them back to Luzira prison until Monday next week when they will rule on their applications.

The duo were charged and remanded to Luzira prison this week after they were arrested on thursday last week on the orders of the parliamentary committee on commissions, statutory Authorities and state enterprises in relation to the disappearance of some documents of the closed commercial banks.

The committee faulted them on how they failed to explain how the alleged crucial documents in related to the closed and liquidated banks disappeared from Bank of Uganda they were guarding.

The officials have denied the charges and are seeking bail.

BOU secretly looked for bidders for Global trust bank reveals Bagyenda

By Alice Bagyenda

The parliamentary committee on Commissions, Statutory Authorities and State Enterprises imposes a travel ban on the embattled former Bank of Uganda (BoU) Executive Director in charge of Supervision for commercial banks Justine Bagyenda.

This was after the committee chairperson also Bugweri county Member of parliament Abdu Katuntu asked Bagyenda to deposit her two passports ( the East African passport and the International) with Parliament until the probe is over.

Bagyenda was apearing before the committee to give evidence on the irregular closure of seven commercial banks after snubbing it two times.

Katuntu notes that her traveling has caused the committee a bit of inconvenience since she is a key witness in the liquidation of three commercial banks following their closure hence she must sit throughout the process and answer all the questions that may arise.

Meanwhile, the circumstances under which Bank of Uganda (BoU) sold assets of closed banks at 93 per cent discount to a now defunct offshore company registered in Mauritius remain unresolved after Bagyenda appeared without any documentation defending the sale.

A forensic audit report by the Auditor General indicates that the total loan portfolio of Shs135b for International Credit Bank, Greenland Bank, and Cooperative Bank which had valid, legal or equitable mortgage and was supported with legal documentation, were sold to Nile River Acquisition Company at a 93 per cent discount.

Bagyenda who first took an oath before the committee says she does not remember the justifications for the decision.

The selling of the loans to Nile River Acquisition Company has become a particular source of interest because the firm was incorporated in Mauritius on September 26, 2007 as a global business, the same year BoU officials sold the assets of the three banks.

The committee was also concerned about why global trust bank was sold on the same day it was closed but Bagyenda said that the bank had secretly looked for the bidders after
realizing that the bank financial status was not good.

Transparency international boss disappointed by conduct of BOU leaders in COSASE grill

By Deo Wasswa

Moses Waidha, the board member of transparency international Uganda says the way officials from Bank of Uganda are behaving in the COSASE committee on the closure of the commercial banks probe is enough evidence to show that they did it intentionally to defraud the tax payer’s money.

Speaking to journalists during the flagging off the anti corruption week today, Waidha noted that some of the officials being investigated are influential people in the government and they know that there are clear opportunities for them to come out of this saga.

He says the kind of impunity and level of theft being exhibited by these officials in the committee calls up the joint efforts from all private and government anti corruption agencies to help COSASE on the matter. But What’s more important is that after the investigations where will the report go”? He added.

This week Uganda will join the rest of the world to commemorate the anti corruption week 2018. The global corruption perception index 2017 ranked Uganda at the position of 152 out of 180 countries and territories.

According to Unite nations, corruption, cruelty, theft and tax evasion cost developing countries like Uganda approximately USD 1.26 trillion.

Speaking at the same press conference, John Mary Odoi noted that while much progress has needs made to date to expose corrupt acts, more needs to be done now not tomorrow.

“Despite much legal and institution framework have been put in place to combat corruption, there is still much work left to do.’’ he said. According to him, there are still weak or ineffective laws, little enforcement and limited resources to affect change and rampant abuse of power in the country which has led to slow movement in curbing corruption, with few tangible results to show for their efforts.

He has called up on Ugandans to participate in the anti corruption week activities and also to take up their role of fighting corruption since it is key in improving service delivery in the country.

British law demanded by buyer to sell local banks

By Edwin Muhumuza

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.

BOU scrutity pushed to next week

By Alice Lubwama

Parliamentary Committee on commission’s  statutory authorities and state   enterprises (COSASE)  starts hearing  into the closure  of some commercial banks with a directive  to the central bank to avail the committee with necessary information concerning  the closure of seven defunct banks.

The banks in question include Teefe Bank in 1993, International Credit Bank Ltd in 1998, Greenland Bank in 1999, The Co-operative Bank in 1999, National Bank of Commerce in 2012, Global Trust Bank in 2014 and the sale of Crane Bank Ltd to DFCU in 2016.

The probe follows a letter by the committee in 2017 requesting the Auditor General to undertake a special audit on the closure of these commercial banks by the Central Bank after the controversial closure of crane bank.

The report from the Auditor General, John Muwanga which was made public in August queries on how the central bank handled the closure of the seven commercial banks and how bank of Uganda spent over 400
billion on the closure of crane bank and half of this money is yet to be recovered.

The chairperson of the committee Abdul Katuntu in his introductory remarks noted that the objective of this process is to see if any Bank could be handled better in accordance with the law.

However,the committee could not go any further with scrutiny as Bank of Uganda led by the governor Emmanuel Mutebile did not have some of the supporting documents that the committee needed . Hon Katuntu  has now pushed the sitting  to next  Friday.

“Colleagues lets give ours selves  up to  Friday as we internalize the documents,this process is good for the country, it is also good for the central bank and the commercial banks too  , its not postmortem
,but its accountability. as we realise from so far  what we have read none of those banks had been finally  resolved.”Katuntu said.