DFCU Bank will be in the spotlight as parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) returns to continue with inquest into Bank of Uganda sale of seven commercial banks between 1993 and 2016.
In that period Bank of Uganda closed Teefe Trust Bank, Greenland Bank, International Credit Bank, Cooperative Bank, National Bank of Commerce, Global Trust Bank Uganda (GTBU) and Crane Bank Limited (CBL).
Dfcu Bank of which BoU Staff Retirement Benefits Scheme holds shares, respectively bought GTBU in July 2014 and CBL in January 2017 after the former executive director of bank supervision Ms Justine Bagyenda approached Dfcu top managers over phone about the availability of the two banks for acquisition.
Dfcu Bank top managers including the former Managing Director Juma Kisaame are expected to appear before Cosase soon. The Dfcu executives are expected to tell the MPs how they came to acquire both GTBU and CBL given that the transactions are questionable as BoU top managers failed to present related documents and gave conflicting answers regarding the transactions.
For instance, during the probe of BoU, MPs learnt that Dr. William Kalema who was a board member of BoU was also a Board member of DFCU in 2014 when it took over GTBU. Ms Bagyenda is also said to have shared confidential information of GTBU with DFCU Bank top managers, which is against the country’s established banking regulations.
According to the committee members, these factors present a conflict of interest situation in which BoU staff might have benefited at the expense of shareholders of GTBU who are now demanding for over Shs300 billion compensation on top of other costs.
Further, the Auditor General noted that BoU did not carry out a requisite valuation of assets and liabilities of GTBU and CBL resolved using the purchase and assumption arrangement at the time of signing the P&A. “In absence of the valuation and or documented evaluation of alternatives and assumptions used, I could not establish how the terms for the transfer of assets and liabilities in the P&A were determined,” he said.
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