Ugandans dissatisfied with COSASE

By Edwin Muhumuza

Debate on the COSASE report starts this Tuesday (26 February) on the floor of parliament amid high expectations that maybe officials implicated by the probe will be brought to book. What the public is demanding for already are the heads of the culprits.

When it was finally completed and read to the house a section of the public said it had promised too much but only to deliver too little.

While appearing on the Capital Gang Radio Show, Chairperson Abdu Katuntu expressed disgust that members of the public did not appreciate the role of other state institutions. This was in response to claims that his report was toothless and that culprits would walk away free as had been noted in other previous parliamentary reports especially the oil handshake report.

…‘a parliamentary committee report goes to the house where it may be adopted, dismissed or amended. When you have government institutions, they work in accordance with the law. Why we talk about the rule of law is to have different institutions perform different roles. Do not expect a parliament of a republic or a parliament of any country to start having the powers to prosecute or arrest. What will the Judiciary do, Katuntu argued!’

In 2017, Ugandans were angry that 36 government officials shared Shs.6 billion oil bonus code-named the “golden presidential handshake” by officials from the Justice ministry, Uganda Revenue Authority (URA), Ministry of Finance among others. It was this same committee that probed the saga and in public view nothing has been done about the officials. This was one of the issues that Katuntu had to explain in recent weeks amid intense criticism from sections within his FDC party including his successor MP Mubarak Munyagwa for what they said was incompetence during his two and a half tenure as COSASE Chairman.

Now another major report is due for debate by public representatives and the question being asked is what will the discussion help if nothing may be done to those the report seems to indict?

Katuntu says, ‘our focus was in the actions more than individuals because at the end of the day there are state agencies that should be able to take up the individuals. What we did was to say, look here, actually, we used two words deliberately, the officers and officials who participated in this process should take full and personal responsibility. That covers their actions but we imagine that other state agencies now go and look at exactly who handled this process’.

For over two months, Bank Of Uganda (BOU), officials led by the governor Tumusiime Mutebile appeared before the committee chaired by the Bugweri County MP to answer to queries raised by the auditor general’s confidential special audit report which revealed weaknesses in the management of Central Bank and questioned the Governor and his team for the hitches in the closure of at least seven commercial banks.

The sale of Crane Bank, however seemed to have opened a can of worms after the proprietor businessman Sudhir Ruparelia accused Bank of Uganda of being unfair. Crane Bank was a commercial bank licensed and supervised by the Bank of Uganda, the national banking regulator with total assets‎ amounting to approximately ‎UGX 1.81 trillion employing over 600 staff.

This was a much bigger financial entity compared to the other defunct banks and certainly had to attract immense public attention including the media. In his new report to Parliament, the Auditor General, Mr John Muwanga, queried BoU officials on the flaws in the closure of Teefe Bank (1993), International Credit Bank Ltd (1998), Greenland Bank (1999), The Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and the sale of Crane Bank Ltd (CBL) to dfcu (2016)

Most Ugandans are aware that the closure of Crane Bank by Bank of Uganda was illegal, what remains to be seen is what happens to the culprits that were engaged in this illegality and whether other agencies such as the Inspectorate of Government, the ministry of Finance, Criminal Investigations Department of Police will bite.

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.

Kadaga blocks Kasibante’s appointment to COSASE

By Alice Lubwama
The Speaker of parliament Rebecca Kadaga has blocked the appointment of Lubaga North Member of Parliament Moses Kasibante as the Vice chairperson of the committee on commission’s state authorities and statutory enterprises.

This was after the opposition whip Semujju Nganda announced the new leadership of the accountability committees of parliament designating Kasibante as COSASE vice chairperson but Kadaga rejected his appointment noting that he will serve on the committee of appointments where she already designated him.

In August last year Moses Kasibante together with Mubarak Munyagwa were appointed by the FDC president Patric Amurait as the chairperson and vice chairperson of COSASE but their designation was derailed after the speaker ordered that they will have to wait until the two and half years of the then committee expired.

However late last year the opposition started to show their dissatisfaction with the speaker when she ruled that the term of Abdul Katuntu and Anita Among on Cosase was to be extended to allow them finalize the bank of Uganda probe.

In the other changes Amos Lugoloobi has been maintained as the chairperson of Budget committee deputized by Isiaghi Opolot, Asamo Grace and Robinah Rwakoojo have been maintained as the chairperson and vice chairperson of Equal opportunities committee, Enguyu Jenifer and Taaka Agnes are to head the Human rights committee replacing Jovah Kamateeka who has been designated on equal opportunities.

Nandala Mafabi and Okin Ojara are the new leaders of PAC replacing Angelina Osege and Gerald Karuhanga .

The rules and privileges committee will be chaired by Obote Ongalo deputized by Otto Makmot, Governement assurance to be chaired by Kaps Fungaroo deputized by Gilbert Olanya and Mubarak Munyagwa to chair the committee on commissions state and statutory enterprises commonly known as COSASE with Katuntu now to seat on the rules committee of parliament.

Kadaga however retaliate that COSASE will be allowed to finalize its probe into the closure of defunct banks with report expected next month

Parliament expected to discuss the COSASE committee leadership

By Alice Lubwama
Parliament is expected today 15th to discuss the issue of the leadership of the committee of Commissions, Statutory Authorities and State Enterprise as the FDC party insist that Bugweri county MP Abdul katuntu should hand over office to Kawempe south MP Mubarak Munyagwa after his term expired on Sunday.

The opposition leader in parliament Betty Aol Ochan was supposed to meet the speaker Kadaga last evening over the same matter but the speaker was out of office.

FDC spokesperson Ibrahim Ssemujju Nganda told journalists at the party headquarters last week that he had written to Kadaga, reminding her over Katuntu’s hand over this week.

Munyagwa and Moses Kasibante who was appointed vice chairperson say that they are ready to take over the leadership and complete the probe into the investigations of the closure of the 7 commercial banks.

Before parliament went for Christmas recess, speaker Kadaga told mps that she had requested the leadership of the opposition in parliament to allow Katuntu work up to 20th of this month since the matter had reached a critical stage of investigations and changing the leadership will jeopardize conclusion of the inquiry.

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.

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.

Justine Bagyenda has up to Monday to show up or be arrested

By Edwin Muhumuza

Former Bank of Uganda Executive Director of Bank supervision ,Justine Bagyenda, has up to Tuesday next week at 10am to show up at parliament or face arrest. This after she snubbed the committee probing the sale of seven defunct banks by Bank of Uganda.

Being a key witness in the matter, her appearance was deemed so crucial since she was at that time in the early and mid 90’s responsible for the processes leading up to selling insolvent financial institutions.

On Thursday, while appearing before the committee on commissions ,state enterprises and agencies -COSASE, she irked the committee when she repeatedly sought to drag the governor Emmanuel Mutebile and the Board, into the controversial act at an early stage of the probe.

She was supposed to produce progressive reports detailing all activities/steps followed in the liquidation process of Greenland Bank ,which according to committee chairperson Abdu Katuntu, will guide them(legislators) on the dealings leading up to the sale of International Credit Bank(ICB) and Cooperative Bank.

However, emotions mounted when her and her successor, Twinemanzi Tumubweine traded accusations of whether she handed over all files to him amid denial ,that among the documents he was given, such reports were not included, before they were given up to today(23rd Nov) to produce them.

This morning, the committee was disappointed after she failed to attend, indicating in a letter sent to the governor, how she left the country last evening. Members sitting on the committee, accused her of contempt of parliament with some urging the chairperson to evoke powers of the committee to compel the witness to appear.

Others wondered why being cognizant of her importance ,did not notify the committee to grant her permission. In her letter, Bagyenda did not indicate what she was going to do abroad, where she was going and when she will be back.

Amidst this concern, Hon Peter Mugema Panadol,(Iganga Municipality) insisted that police should search for the documents, he said, Bagyenda could have fled with.

Hon.Francis Mwijukye (Buhweju county) sought to inform the committee that media reports had suggested that on Sunday last week, Bagyenda had been spotted at Bank of Uganda, and later seen putting documents in the back seat of her car ,a point committee chair ,Katuntu noted but cautioned the committee on entertaining hearsay.

It is thereafter members’ submissions that powers of the committee were evoked from the Constitution, Parliament power and privileges Act and Rules of Procedure to compel her to appear next week or else a warrant of arrest will automatically follow. The clerk to parliament’s office has also been requested to notify her through her known email address and telephone number. The committee has also directed Police to supply the committee with details of Bagyenda’s Travel from the immigration office.

Stop playing ‘ping-pong’ – COSASE to BOU

By Edwin Muhumuza

Former Director of Supervision for Commercial banks at Bank of Uganda, Ms Justine Bagyenda has been forced by the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) to produce all files detailing the sale of Greenland Bank.

This after members became angry following counter-accusations amongst BOU officials particularly, Ms Bagyenda and her successor Tumubwiine Twinemanzi, on the said files.

Committee chair Hon. Abdu Katuntu had to resort to evoking the powers of the constitution and the committee to compel Ms. Bagyenda to deliver them or face arrest.

‘I need to evoke the powers of the constitution and our rules,Iam therefore directing the executive director Bank of Uganda to produce all the files that were handed over by the then director of bank supervision Ms. Justine Bagyenda to the now in charge of Bank supervision..’Katuntu directed.

Earlier Ms Bagyenda had wanted to give a chronology of events but the committee demanded for the progressive reports.

‘To my recollection, there were progressive reports , which were made to the board….Bagyenda said before she was interrupted by Hon.Katuntu.

‘No!, Ms Bagyenda, let us not play ping pong…there is an officer at the closed banks and by his terms of reference he is supposed to be making progressive reports …..the board comes at the end of the process, we want a nexus;a link between Mr, Ssekabira and the bank before you take us to the board ,so can we have those reports?’.

‘The reports were submitted by Mr. sekabira to the office of the director through the head of division, these reports would be summarized and reported to governor’s office….’Bagyenda remarked before she was again interrupted by the committee.

‘…let me tell you, I think we have a problem here, we don’t want accusations here, it will not help us go forward.

Bagyenda,finally said she does not have the reports since she is no longer in the Bank. Her successor,Mr.Tumubweine Twine, also said he did not have the reports before he went ahead to table documents that were handed to him, that were exclusive of the reports.

Ms Margaret Matovu ,former director of commercial banking department was also put on the spot over the reports.In her submission she noted that they could be at the central bank adding that she received some.

‘I said the reports might be in the bank.’ She said.

‘Might’ Where else could they be? ’the committee asked?

‘I did not have that report of handover but most of the reports were on file when I left the bank’. Matovu responded.

The meeting has been adjourned to 9 AM tomorrow.

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.