The governor Bank of Uganda Emmanuel Tumusiime-Mutebile and his deputy Louis Kasekende are set to appear before Parliament’s Commissions, Statutory Authorities and State Enterprises (Cosase) inquiry today, Wednesday, October 31, 2018.
The meeting, according to Daily Monitor newspaper, will see the two top central bank officials tasked to ‘explain the mismanagement of closed banks and dealings with external lawyers as unearthed by the Auditor General in his special audit report to Parliament.’
The two officials also answer queries raised by the Auditor General, Mr John Muwanga.The daily newspaper reports that the auditor general report ‘revealed weaknesses in the management of the Central Bank and questioned the governor and his team for the hitches in the closure of at least seven commercial banks.’
Bank of Uganda in October 2016 took over management of Crane Bank and accused the Ruparelia Group owned bank of being ‘significantly undercapitalised’ and ‘poses a systemic risk to the stability of the financial’. The central bank said ‘continuation of Crane Bank’s activities in its current form’ was ‘detrimental to the interests of its depositors.’
A year later it sold Crane Bank to dfcu bank for at Shs200b. Daily also reports that a whistle-blower also told Cosase that BoU officials wrote off Crane Bank loans amounting to Shs600b through unclear circumstances.
The auditor general 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). All the former directors of the above closed banks will also be cross-examined by the committee this week.
The governor and his team will also respond to queries regarding unaccounted for funds, missing land titles and customer loans that were inherited from closed banks and sold at an undervalued rate. The MPs led by Abdul Katuntu will also seek to open the veil on the disputed sale of Crane Bank to dfcu at Shs200b. The AG observed that the assets and liabilities of Crane Bank were sold without any valuation.
Pressure was further piled on BoU and dfcu Bank by 400 ex-employees of Crane Bank who yesterday sought audience with Speaker Rebecca Kadaga to present a petition demanding an investigation into a Purchase of Assets and Assumption of Liabilities (P&A) agreement that was signed between BoU and dfcu Bank without the knowledge of ex-Crane bank staff. The AG also queried this agreement. They are demanding Shs48b in terminal benefits.