Two BOU officials sent to jail over corruption

By Sania Babirye

The anti corruption court has remanded to Luzira prison two Employees of Bank of Uganda who are facing corruption charges.

These have been identified as 36 year old Francis Kakeeto is a banker working as a Branch manager of Bank of Uganda -Mbale Branch and 42 year old Fred Vito Wanyama an Assistant Branch manager

These have been remanded by grade one magistrate Abert Asimwe after they pleaded not guilty to charges of Abuse of office when they allegedly allowed inclusion of unauthorized cargo on a chartered plane carrying printed material of Bank of Uganda .

According to the charges sanctioned by the Director of Public Prosecutions Mike Chibita, the pair was assigned by their employer (BOU) to carry out a pre-shipment inspection of printed material in France but in total abuse of their respective offices allowed inclusion of unauthorized cargo on a chartered plane.

In the alternative, the 2 suspects are facing a charge of corruption in which they are said to have corruptly neglected to perform their duties by failing to report unauthorized cargo on a plane fully chartered by Bank of Uganda .

The 2 men allegedly committed the offenses on 26th/April 2019 between France, Belgium and Entebbe International Airport .

The magistrate also denied them bail and remanded them until Tuesday next week to consider their second bail application since he found their first sureties not substantial.

The said sureties had no pepper identification documents to present in court including LC letters to prove area of residence.

The two were arrested following a complaint by Bank of Uganda Governor Emmanuel Mutebile who tipped the anti corruption unit of state house following his suspicion of extra cargo that entered the country abode a chartered BOU plane that was carrying printed material.

According to reports, the plane landed at Entebbe International Airport on the 27th of April 2019 and was cleared by URA officials in the presence of Bank of Uganda officials and Aviation security .

However according to a statement from Bank of Uganda , the chartered plane had to carry 20 pallets instead of 25 .

The alleged anormally was detected during the verification of the consignment hence commencement of investigations which have sofar revealed that the extra cargo belongs to powerful businesmen in the country and organisations.

A joint investigation between CID and State House Anti-corruption unit has sofar led to the arrest of a number Bank of Uganda officials .

Police confirms that CID is handling BOU saga

By Robert Segawa
Police revealed that the Directorate of Criminal Investigation has taken over the investigations into the irregularities surrounding the printing of money in the Bank of Uganda.

Last week a team of state house anti-corruption unit led by Lt Col Edith Nakalema accompanied by a joint security team raided the Bank of Uganda following allegations of the unauthorized printing of 90 Billion Shillings which was brought in the country through Entebbe international airport in May this year.

Addressing a new conference at police headquarters in Naguru, Fred Enanga the police Spokesperson noted that the police criminal Investigation division has now taken over full control of this investigations under the supervision of Assistant Inspector General Of Police Grace Akullo with assistance from the state house anti-corruption unit

Fred Enanga noted that the investigation team is aimed at knowing who authorized the printing of the extra money.

Enanga added that they have so far recorded several statements from Bank of Uganda directors who includes Director banking, Director legal, Auditors as well as officials of Uganda revenue authority Customs at Entebbe international airport and Entebbe handling service ( ENHANCE).

Enanga also revealed that police is still trying to obtain statement from lawyers of UN and other business men whose names were mentioned in this saga.
He adds that police investigation department carried on Search on homes of officials of Bank of Uganda to find out what extra money printed.

Enanga says that as per now they have six suspects in police custody as investigations still on going .

Sudhir demands for return of banks’ bad loan book

By Deo Wasswa

The vice chairman of the defunct Crane Bank, Business man Sudhir Ruparelia has demanded for the return of the banks bad loan book which he values at UGX570 billion.

The bank was closed in October 2016 and sold to DFCU three months later.

Sudhir made the appeal during a presentation by shareholders of the bank before the COSASE.

According to the former chairman of Crane Bank Joseph Biribonwa The bank of Uganda had a premeditated plan to asset strip Crane bank and sell it to a preferred buyer.

He told Members of Parliament that the Bank Of Uganda frustrated the efforts by the share holders to bring in an equity investors.

Birobonwa had earlier told MPs that the liquidity crisis at the bank had been caused by an economic downturn in 2014/2015.

He blamed the BOU for causing loss of confidence in CB in April 2016 by halting the bank from issuing letters of credit, bonds and bank guarantees. In addition he said the BOU placed a lien on treasury bills held by CB worth 169bn.

These actions he said killed the bank since they caused capital flight and serious reputation damage.

The lien on treasury bills also led to equity investor Atlas Mara losing interest in Crane Bank.

He revealed that the shareholders had raised capital amounting to 8m dollars which funds were detained by BOU and not allowed in the bank.

He also disclosed that on 19th October 2016 Crane bank had agreed to terms of a loan from the central bank amounting to 79.2bn shs but the BOU moved to take over the bank that very night at 11pm.

He noted that BOU made the decision to sell Crane Bank in November 2016. This was less than a month after the takeover and in violation of the financial institutions act.

The chairman of Ruparelia Group who was vice chairman of the Bank Dr. Sudhir Ruparelia told the MPs that the shareholder of the bank demand the return of the bad loan book that was handed to Dfcu.

He demands for the return of 23.5 dollars raised by the shareholders and held by the BOU.

Katuntu given one more month to complete BOU investigations

By Alice Lubwama
The opposition side in parliament has finally agreed that Bugweri county MP Abdu Katuntu continue chairing the parliamentary committee of commissions statutory authorities and state enterprises till 15th of February when the committee will be done with the investigations into the closure of the seven commercial banks by the central bank.

The decision was made following a closed meeting between speaker kadaga and the leader of opposition in parliament Betty Aol Ochan over the matter.

Ever since kadaga announced that Katuntu would continue chairing the committee until the central bank probe is concluded, there has been a lot of bickering between the members of opposition them selves and exchanges between Kadaga and Aol.

The main opposition party in parliament FDC had made changes in the leadership of this committee, dropping katuntu as chairperson replacing him with Kawempe south MP Mubarak Munyagwa.

In December last year, speaker of parliament Rebecca Kadaga told parliament that she had requested the Leader of opposition in parliament to allow for the extension of Katuntu leadership for him to conclude the investigations because it had reached a critical stage where the changes would jeopardize them but the request was turned down by the leader of opposition.

Shortly after the meeting the Leader of Opposition Betty Aol Ochan said that the decision was made in order not to water down the investigations that have been made by the opposition

Loans transferred to DFCU were duplicated reveals COSASE

By Alice Lubwama

The Parliamentary committee on commission’s statutory authorities and state enterprises investigating the closure of 7 commercial banks chaired by Bugweri county MP Abdul Katuntu has directed the officials of the central bank led by the Governor, Emmanuel Tumusiime Mutebile to avail accountability of a sum of478bn shillings that was injected in the defunct Crane Bank Limited for liquidity support.

The Chairperson of the committee Abdul Katuntu says that even though they have documents indicating that this money was requisitioned to recapitalize the crane bank but they are yet to get accountability.

The former Statutory Manager of Crane, Edward Katimbo Mugwanga who received the liquidation fund from bank of Uganda last week told the committee that he never handed over a report to bank of Uganda since the bank was closed before the process was concluded.

Katimbo also told the committee that before he could finish his work, he received a message from a colleague on whatsapp showing him how files were being transported on a truck from Crane Bank to DFCU.

How ever Katuntu also says that the committee has discovered that about 4458 loans which were transferred from crane bank to DFCU bank were duplicated.

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.