Finance

Finance (278)

Uganda Completes Deal To Export Shs600b Worth Of Marijuana

Uganda is set to export medical marijuana products to Canada and Germany worth Shs600b in June, Daily Monitor has learnt.

It has also emerged that on December 7, 2017, Uganda exported unrefined cannabis buds/ flowers to South Africa’s National Analytical Forensic Services in Pretoria. The order to Industrial Hemp (U) Ltd, a private company, was valued at $10,000 (Shs37.1m).

The marijuana exports from a farm in Kasese District include Cannabinol (CBD) and Tetrahydrocannabinol (THC) with mixture of 2.7mg THC and 2.5mg CBD for Sativex drugs approved in USA, Europe and Canada. Oil Risin contain Dronabinol for making Marinol and syndros capsules and CBD enriched creams for various skin disorders.

Mr Benjamin Cadet, one of the directors at Industrial Hemp (U) Ltd, a private firm jointly working with an Israel company, Together Pharma Ltd, yesterday confirmed medical cannabis orders from at least 20,000 pharmacies in Canada and Germany.

“We signed annual supply contracts with pharmacies in Canada to a tune of $100m (Shs371.8b) and €58m (Shs242.3b) for Germany… the current contracts run for 10 years but along the way, we shall expand to satisfy future demand,” Mr Cadet said.

“People are using morphine, the main component of opium as an analgesic for cancer pain. Opium is an Opioid and more addictive and with side effects yet Cannabinol (CBD) from medical marijuana is the best option for such patients…Cancer patients are using CBD illegally. We have the scientists and the technology to do this but regulations are not in place to allow cannabis drugs manufactured for domestic consumption,” he added.

WebMD, a global website that provides health information, states that the greatest amount of evidence for the therapeutic effects of cannabis relate to its ability to reduce chronic pain, nausea and vomiting due to chemotherapy and spasticity [tight or stiff muscles].

The news about the exportation of medical marijuana products came as a five-member Cabinet committee chaired by the Prime Minister, Dr Ruhakana Rugunda  and includes Health minister Jane Ruth Aceng, Trade (Amelia Kyambadde), Finance (Matia Kasaija), Agriculture (Vincent Ssempijja), and Internal Affairs (Gen Jeje Odongo), was scheduled to meet morning to discuss the dangers and benefits of medical marijuana.

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DFCU Bank Head Of Consumer Banking Quits

DFCU Bank has ceased to be an ideal place to work if the continued departure of senior managers who have left to go work in other banks is anything to go by. The latest senior manager to quit troubled DFCU is Denis Kibukamusoke who has been working as the Head of Consumer Banking.

Rukh-Shana Namuyimba, the Communication Manager at DFCU Bank told journalists that Kibukamusoke will be replaced by Miranda Bageine Musoke, the Head Personal Banking in an acting capacity. Kibukamusoke has been part of DFCU’s success story for a cumulative 8yrs.

DFCU Bank last month announced that Dr. Winifred Tarinyeba Kiryabwire, who was a director on the board of DFCU bank had left her post. DFCU Bank lawyers Ligomarc Advocates, in a public notice, said Dr. Kiryabwire resigned ‘due to commitments she is due to undertake in another regulated entity.”

Also last month Ms Agnes Tibayeyita Isharaza who was the chief legal officer and company secretary quit to after getting a better job at National Social Security Fund (NSSF) where she had been appointed by the finance minister Matia Kasaija as Corporation Secretary and head of legal.

Ever since DFCU Bank bought Crane Bank from Bank of Uganda in a deal many say was riddled by corruption has been facing public scrutiny something that has affected its performance. This has forced some their trusted investors to rethink their association with the commercial bank.

Why Bank Of Uganda Lawyer Fell Out With Kabaka

Fresh information is coming up informing why the Kabaka of Buganda Ronald Muwenda Mutebi fired his third Deputy Katikkiro and once trusted lawyer Apollo Nelson Makubuya.

A report by Buganda Today’s Kato Mugwanya explicitly explains the rise and spectacular fall of Apollo Nelson Makubuya below.

Apollo Nelson Makubuya was recently fired by Kabaka Ronald Mutebi from his position as third Deputy Katikkiro ending over 20 years as one of the key men in Mengo. Makubuya was brought into Mengo by Katikkiro Joseph Mulwanyamuli Ssemwogerere who had been his boss at the now defunct Ssebuule Investment Bank. Mulwanyamuli wanted a henchman and gave him unlimited access to the Kabaka.

Kabaka Mutebi would trust him with many of his legal issues getting tutelage from the impeccable John W Katende. Kabaka Mutebi was duped to think that he had got a man he could trust and elevated him to key positions. What Kabaka didn’t know is that Makubuya was using his Mengo office to enrich himself and build a power base that would one day see him as President of Uganda.

First, Makubuya established himself by using his position as Kabaka’s attorney to acquire land on the cheap. His magnificent home on Lubowa hill is on Kabaka’s land where he has used his position not to pay ground rent and other such fees. His hotel, Hot Springs in Ndejje Namasuba, is also on Kabaka’s land. His country home in Matugga that sits on one square mile of land is also on Kabaka’s land as well as his commercial buildings in Kyengera including one where Equity Bank, where he is Chairman of the Board, rents. Makubuya is so deceitful that he could have his buildings rented by the bank whose board he chairs at triple market rates. His building on Buganda Road is also occupied by Equity Bank. Makubuya will always use his positions to become wealthy – Equity Bank or Buganda Kingdom.

Former Owek Apollo Nelson Makubuya

That explains the COCASE debate, which questioned Makubuya’s role as an advisor for Bank of Uganda on closure of banks and at the same time being chair of a competitor bank. Makubuya was the chief advisor to Justine Bagyenda, the former Bank of Uganda executive director who closed banks including Baganda owned banks like Greenland on Makubuya’s advice.

Second, Makubuya built a power base using his Anglican friends at Namirembe Cathedral. This group in order to promote Makubuya started making trips to the Bbanda palace to convince the Kabaka that it was time he appointed an Anglican Katikkiro. One of the groups was led by Nelson Kawalya, the Lukiiko Speaper, who was fired alongside Makubuya. Whenever Kabaka asked them who they thought could be best suited for this position, they said Makubuya. Kabaka smelt a rat when three different groups fronted Makubuya and started investigating him.

In December 2018, Kabaka received a dossier containing the schemes Makubuya has been involved in to undermine him in order to force his hand to be appointed Katikkiro. The Kabaka is said to have left for London with the file and studied it like he was doing an exam.

Makubuya’s Ndeje hotel on Kabaka’s land

What infuriated the Kabaka more was the Male Mabiriizi case. Makubuya as Minister of Justice and Constitutional Affairs charged high rates to represent Kabaka but did nothing. He always made some demands such as a lawyer of his own choice as PA, a driver, a secretary, and legal assistant. Kabaka saw Makubuya who said didn’t have time to attend cabinet and Buganda Lukkiiko busy promoting his book and wondered where he found the time.

The Kabaka had given him whatever he demanded but Makubuya instead concentrated on building a power base instead of taking on Male Mabiriizi. Kabaka was being sued by a greedy lawyer and his attorney — Makubuya was busy advising Bank of Uganda to close banks and acquiring land from Buganda Land Board on the cheap.

Makubuya had also promised to use his close contacts with the government to advance the federo case — it is the reason Kabaka appointed him 3rd deputy Katikkiro. Since his appointment, Makubuya did nothing to demand for federo. His annual reports were always empty. His only interest was always to be addressed as Oweekitiibwa. Frustrated of his lack of devotion to the Buganda cause, Kabaka while taking a break at his Baamunaanika Palace fired his good for nothing lawyer. However, to make a soft landing for him, he made him a Senior Palace Advisor and at the same time appointed Ambassador Emmanuel Ssendawula as Chairman of advisors. Makubuya, by the time, of writing this had not been seen out of his Lubowa home where he is consoling himself with expensive whiskeys. The only person seen going there to console him was Daudi Mpanga, with whom they have a good friendship as both Bank of Uganda lawyers.

AfDB Gets Canada's US$1.1bn Capital Support

On the sidelines of the World Bank-IMF Spring meetings, Canada announced a $1.1 billion commitment in temporary callable capital to support the African Development Bank. Canada's announcement, to be approved by the Bank's governors, was made by Maryam Monsef, the Canadian Minister of International Development and for Women and Gender Equality.

"I am happy to say that today, Canada is demonstrating its commitment to African countries and our confidence in the African Development Bank by announcing that we are going to subscribe up to US$ 1.1 billion in temporary callable capital, if required." Minister Monsef toldmembers of the Diplomatic Corps based in Washington D.C., governors of the African Development Bank, executive directors, including executive director David Stevenson, who represents Canada, China, Korea, Turkey and Kuwait. The Bank's senior management team was also in attendance. 

The announcement comes a day after a meeting of the Bank's governors in Washington D.C. to continue discussions on a 7th General Capital Increase.

"The African Development Bank is a key partner for Canada and we are committed to supporting the Bank's African member countries. Canada and Canadians are proud of our long history of partnership and collaboration with Africa," Monsef noted, before reminding the 100 attendees that Canada was determined to ensure that "no less than 50% of bilateral development assistance is dedicated to sub-Saharan Africa by 2021-2022."

Commenting on the announcement, the Bank's President, Dr Akinwumi A. Adesina said "Canada's commitment and support is a huge boost to the African Development Bank. It will allow the Bank to strengthen its Triple A rating and increase lending to member countries while discussions are ongoing among all shareholders for a general capital Increase."

"Your announcement is a clear indication that Canada has strong confidence in the African Development Bank," Adesina added, while extending the Bank's appreciation to Prime Minister Justin Trudeau for Canada's unwavering support.

Minister Monsef urged other AAA-rated member countries to join Canada in providing temporary callable capital to the Bank. "I sincerely hope that this announcement will facilitate the general capital Increase negotiations and help support your efforts. Canada stands with you."

In a follow-up bilateral meeting, Minister Monsef and President Adesina discussed values and interests in common on gender and increasing access to finance for women, as well as on climate and renewable energy issues.

Canada has been a member of the African Development Bank since January 1983 and has participated in all general capital increases of the Bank. It provided temporary callable capital in 2010 while the GCI VI negotiations were ongoing.  That decision enabled the Bank to continue to provide its support to regional member countries in the aftermath of the international financial crisis.

As at 30 June 2018, Canada's total capital subscribed amounted to $3.5 billion of which $252 million has been paid in and $3.22 billion stands as callable capital, making Canada the 4th largest shareholder among the Bank's non-regional member countries.

Nakalema Starts Investigating IGG Mulyagonja’s Office

The State House Anti-corruption unit under Col. Edith Nakalema has kicked off investigations into the office of the Inspector General of Government following a petition by a whistle blower saying the ombudsman’s office is a beehive of corruption and abuse of office.

The unnamed whistle blowers says IGG has instilled fear among workers while others hold office illegally. The whistle blower notes that Inspectorate of Government (IG) staff can't freely express themselves anymore hence the decision to petition Nakalema.

The whistleblower urges Nakalema to reign on Irene Mulyagonja’s office. And Lt. Col. Nakalema has heeded to the petitioners call and commenced investigations in Mulyagonja’s office and operations on Wednesday, April 11.

The not named petitioner says allegations of bribery among IG staff are real. “This is because the environment here at IG is that every man for himself,” the whistleblower said.

“Everything is wrong from the formation of the work plan for the budget to the procurement of service provider for construction of IG headquarters, to the training of staff, to handling complaints and also prosecution,” the whistleblower adds.

“Without mentioning names, some staff are currently receiving bribes of cases not registered from the accused persons, bribes going as high as Shs350, 000,000 per allegation. That is partly why the IG is not performing.”

“The Inspectorate of Government requires new leadership as soon as possible. The current leadership besides Mariam Wangadya, are already operating like they have left and do not care about the issues of the staff. We beg the president to force her resignation if possible,” the petition says.

During the 2018 State of the Nation Address, President Yoweri Museveni hit at IGG Mulyagonja’s office for failing to fight corruption and subsequently, named a new three man’s committee headed by James Tweheyo to handle corruption-related cases.

World Bank Launches Human Capital Plan To Propel Investment In Africa

The World Bank unveiled a new plan to help African countries strengthen their human capital. The objective of the plan is to enable Africa's young people to grow up with optimal health and equipped with the right skills to compete in the digitizing global economy.
 
Sub-Saharan Africa scores the lowest of all the world's regions on the World Bank's Human Capital Index, a measurement of how well countries invest in the next generation of workers. The score is explained by high mortality and stunting rates in the region, as well as inadequate student learning outcomes - all of which have a direct effect on economic productivity.
 
In an effort to help countries turn these indicators around, the World Bank's Africa Human Capital Plan is setting ambitious targets to be achieved in the region by 2023. These include a drastic reduction in child mortality to save 4 million lives, averting stunting among 11 million children, and increasing learning outcomes for girls and boys in school by 20%. These achievements can raise Africa's Human Capital Index score upwards to increase the productivity of future workers by 13%.
 
"Preventing a child from fulfilling his or her potential is not only fundamentally unjust, but it also limits the growth potential of economies whose future workers are held back. GDP per worker in Sub-Saharan Africa could be 2.5 times higher if everyone were healthy and enjoyed a good education from pre-school to secondary school," says World Bank Vice President for Africa Hafez Ghanem at the launch of the Bank's Plan during the World Bank-IMF Spring Meetings.
 
The Plan also aims at empowering women to prevent early marriage and pregnancy for adolescent girls.   "The adolescent fertility rate in Sub-Saharan Africa is 102 births per 1,000 girls-three times as high as in South Asia. This not only damaging for girls and their children, but it also hurts economic growth," noted Ghanem.
 
The World Bank will increase its investments in human capital in Africa by 50% in the next funding cycle. This includes new World Bank grants and concessional finance for human capital projects in Africa totaling $15 billion in fiscal years 2021-2023. The World Bank will invest these funds strategically to unblock structural constraints to human capital development. The World Bank will also target game changing interventions that leverage technology and innovation and that prevent and reverse damage to human capital in fragile and conflict-affected settings.
 
The World Bank is already supporting countries to come up with new strategies to invest more and better in their people. Twenty-three African countries, covering over 60% of the region's population, have joined a coalition of nearly 60 countries to join the Human Capital Project, committing to a set of accelerated investments in their human capital.
 
"Human Capital Project countries are breaking away from traditional paradigms to make investment in their people a priority and are working in a more coordinated way across government to ensure that households have the right enabling environment to support human capital formation," said Annette Dixon, World Bank Vice President for Human Development.
 

dfcu Bank Ordered To Repay Shs1bn Inherited Global Trust Bank Loan

Troubles hitting DFCU Bank continue to pile up and are not about to let the struggling commercial bank enjoy a breath of fresh air. The latest painstaking news involving DFCU Bank is that the High Court’s Commercial Division in Kampala has commercial bank to pay consulting firm Real Marketing $266,000 for breach of contract.

According to several media sources, trouble for DFCU Bank arises from a loan and its collateral from the defunct Global Trust Bank, whose assets and liabilities it inherited after the latter’s closure by the Central Bank about five years ago. 

According to court directives, DFCU Bank was given 30 days (from March 19th until April 19th) to oblige. The award arose from an initial $139,201 price of land, but accumulated interest fixed at 30 per cent now pushes the costs further.

The court’s orders follow a trial involving the two companies after the bank failed to hand over land titles to Real Marketing. The land was meant for resale and other developments. “Denying the plaintiff title for five years was to create a painful economic upset,” reads Justice David Wangutusi’s judgment.

“In conclusion, judgment is entered in favour of the plaintiff … the defendant delivers the certificate of title for the suit land together with the transfer instrument within 30 days. In default of which they will refund $140,000.”

The court also awarded interest on that money at 30 per cent, which reflects the commercial value of money since 2013 when the transaction was initiated.

At the time, Real Marketing bought 10 acres of land that forms part of 43 acres from Global Trust Bank.The title of the land was held by the bank as a mortgage from defunct real estate dealer, Hossana.

Global Trust Bank had powers under the mortgage to sell the property without recourse to court if the money Hossana owed it was not paid. Hossana defaulted and the bank moved to sell the land.

Real Marketing paid partly by cash and partly borrowed the loan from the same bank to pay. The agreement between Global Trust Bank and Real Marketing was that upon completion of loan repayment, the bank would pass over vacant possession of the 10 acres.

At the time Global Trust Bank was placed under receivership, Real Marketing had not completed repayment. DFCU bank took over the closed bank’s liabilities and assets in 2014, and hence became responsible for the transaction involving Real Marketing.

Even though Real Marketing completed repayment of the loan balance through new DFCU’s ownership, and was duly issued with a certificate, the bank did not hand over the land in spite of several remainders, leading to the legal battle.

Whistle Blower Want Mulyagonja Fired From IGG Job

All is not well with the Inspector General of Government (IGG) Justice Irene Mulyagonja after a whistle blower in a 20th March letter wrote to the State House based anti-corruption office asking its head Lt. Col. Edith Nakalema to use her influence have President Yoweri Museveni fire the IGG and replace her with a capable person, Mulengera Media, reported on Thursday.

The unnamed whistle blowers says IGG has instilled fear among workers while others hold office illegally. According to Mulengera Media, the whistle blower notes that Inspectorate of Government (IG) staff can't freely express themselves anymore hence the decision to petition Nakalema.

One of the issue raised relates to Human Resource matters in reference to IG employees who have been holding Regional Inspectorate Offices (RIOs) and Principal Inspectorate Offices (PIOs) in care taker capacity for now three years (counting from the FY2015/20016).

The petitioner also says the promise was to confirm them (as RIOs/PIOs for the various regional offices) after six months which hasn't happened; that even without being confirmed, the officers have continued getting allowances for holding the positions in acting capacity.

The petitioner adds that they have been asserting themselves demanding confirmation in vain explanation being that there is no money for the additional wage bill; that management keeps telling them they don't merit confirmation since they are just caretaking yet colleagues were previously confirmed under similar circumstances.

The whistle blower begs Lt. Col.  Nakalema to intervene and stop the irregular recruitment. "To be honest with you with you, the Inspectorate of Government requires new leadership as soon as possible in any case it should have happened yesterday. The current Management are already operating they have left and do not care on the issues of staff. We beg the president to force her (Mulyagonja) resignation if possible,”

“Allegations of bribery among the IG staff are real. This is because the environment of work plans for the budget, to procurement of a service provider for construction of the IG headquarters, to training staff, to handling complaints/investigations and also prosecution. Without mentioning names, some staff are currently receiving bribes going as high as Shs350m over allegation. That partly explains why the IG is not performing' the whistle blower concludes.

In response, Justice Mulyagonja told Mulengera Media that the whistle blower can take the matter to President Museveni if they feel they have a strong case. "If they think i have misconducted myself or become incompetent or become mentally incapable of doing my duties, i will go once they convince the President.”

BoU Should Account For Shs478b Crane Bank Cash Before Parliament Approves Shs484b For Recapitalization

The Central Bank has run to Ministry of Finance seeking approval of shs 484 billion as recapitalization to cover deficits and loses accumulated since 2013.

The Ministry of Finance has also run to parliament requesting for approval of shs 620 billion for planned recapitalization of the Central Bank and other five banks which require shs 136 billion.

Ministry of Finance Accountant General Lawrence Ssemakula told a parliamentary committee chaired by Rubanda East MP Henry Musasizi (NRM) that the Central Bank had indicated to the Ministry that it had suffered deficits since June 2013 and that the money was needed to avert an impending crisis.

“They [BoU] have indicated that they have been impaired from June 2013. So as per the BoU Act, we have no option but to allocate the money in our budget since their operations are in deficits,” Mr Ssemakula said.

When MPs asked whether the ministry had done due diligence on the request by the Central Bank managers, Mr Ssemakula said the deficits are captured in the Auditor General’s reports.

Hard Questions

All eyes are now on Parliament of Uganda whether the legislators will ask hard questions related to the crisis at Bank of Uganda and its previous shenanigans in which the regulator fraudulently disposed off 7 commercial banks.

The fraud in sale of these banks was first captured in Auditor General’s report and thereafter the investigative committee of Parliament- COSASE which came up with harsh recommendations which are yet to be implemented at Bank of Uganda.

The MPs must take into account that in a period between October 2016 and January 2017, Bank of Uganda seized the fastest growing commercial bank in Uganda which had formed 48 branches across the country, Crane Bank Limited.

The claim was Crane Bank had nosedived into gross insolvency. At the time of selling it off it to DFCU bank, BoU claimed it injected shs 478 billion to recapitalize Crane Bank but in vain.

It thus negotiated with DFCU, a process that was queried by Auditor General and sold Sudhir Ruparelia’s bank at shs 200 billion.

It is therefore startling for BoU to accept to make a loss of 278 billion having sold Crane Bank at 200 billion after injecting in 478 billion.

The legislators on the budget committee should bear in mind that the Auditor General failed to trace shs 270 billion as part of 478 billion which BoU claimed was Crane Bank’s recapitalization.

Efforts to have BoU account for 270 billion remained futile.

The MPs also must consider the COSASE reports whose findings expose the regulator as wanting and its top officials held liable for causing a mess in 7 defunct banks that cost taxpayer’s money.

For example, COSASE found out that BoU hired external legal firms at a cost of shs 3 billion but there was no contractual agreements neither would the legal firms account for this money.

In simple terms the legal firms did nothing but were paid.

So Parliament of Uganda will be hurting the economy by continuing to pump money in an institution that doesn’t provide accountability.

Parliament must exhaust COSASE which was compiled using taxpayer’s cash, its finding considered and recommendations implemented on restructuring both the management and regulatory regime at the central bank.

The people who are behind the mistakes that led to the need for recapitalisation, cannot be the same people to manage the recapitalised central bank.

SOURCE: TRUMPET NEWS

How IGG Summoned But Declined To Investigate BoU

The Inspectorate of Government (IGG) Irene Mulyagonja ordered decline to proceed with a probe on Bank of Uganda officials even when he summoned them to his office sometime back, Trumpet News reports.

The motive by the IGG to stop investigating the mess at the Central Bank remains unknown and has since sparked off debate in top government offices.

“Even when an investigative committee of Parliament, COSASE investigated and recommended that top officials in the Central Bank should personally be held liable for the mess caused while closing off seven private banks, the IGG, didn’t express interest in the taking the up matter,” an official in Presidency who wished not to be named wondered.

He further reasoned, “the role Parliament is to make laws, policies but doesn’t implement those laws. Similarly, COSASE spent time in investigating and indeed unearthed the rot. The public itself was sucked into the investigations because it was open on TVs. Indeed, everyone saw that something was wrong.”

“COSASE wasted taxpayer’s cash on the investigations we will not allow the case to keep hanging in air. It must be concluded.”

But the IGG’s office through the Spokesperson, Ali Munira responded that, “According to the rule of procedure of parliament, all reports debated by parliament make recommendation to the relevant stakeholders to take action. Therefore, in the event that there are no recommendations then the IGG would most likely not come in.”

Asked why would IGG wait for Parliament to seek her intervention yet it’s the mandate of her office to swing in action investigate and arrest those found liable even before Parliament, Munira highlighted a few cases in which IGG made parallel investigation as Parliament also interrogated those officials named the mess.

“Sometimes there are those reports that are debated by parliament but we have our own investigations…e.g you recall Kyambogo University, NSSF? Parliament was probing but we were also investigating.”

It is against this particular response that this website wondered whether BoU was special for the IGG to decline to conduct her independent investigations on the officials whose names had been mentioned as having participated in the fraudulent closure of seven banks.

The IGG’s office has in several occasions come under immense scrutiny by government in the manner how it conducts investigations and why the cases of corruption in government offices have scaled up.

The President last year openly attacked Mulyagonja as useless who has failed to fight corruption.The President vividly angry commissioned a parallel Anti Corruption Unit from State House led by Edith Nakalema. The unit is answerable to the President.

What further shocked the nation is when IGG after closure of COSASE investigations wrote to Internal Security Organization (ISO) to investigate the leadership of the committee on allegations that it had received bribes from businessman Sudhir Ruparelia whose bank was also closed.

Irene Mulyagonja’s letter prompted Speaker of Parliament Rebecca Kadaga to summon the IGG to explain her claims. She was accused of bias in favour of Bank of Uganda officials.

Fresh Scandal

As the country awaits investigative bodies to administer probe on Bank of Uganda, the Deputy Governor Louis Kasekende wanted to take advantage of that office and hoodwink auditors there when he requested for a fresh audit of Shs478 billion that the central bank claims was injected in Crane Bank Limited (CBL) while under statutory management between October 20, 2016 and January 25, 2017.

“They wanted to hoodwink us that the verification is honest yet it’s a trick…They are stuck because they denied auditor General documents and this is a crime under national Audit Act,” the official who preferred to remain anonymous said, adding that it is Kasekende and his colleagues at BoU to blame for failing to account for the money that was drawn from taxpayers’ coffers.

On January 25, 2017, BoU transferred CBL to DFCU Bank at Shs200 billion, moreover to be paid from the collections of CBL’s bad book of Shs570 billion, which meant that DFCU Bank acquired its rival CBL without paying a single coin.

“Am told the reason why BoU wants verification of Crane Bank cash is for court purposes. They want AG to clear them. Half of Shs478 billion was diverted. Now they are trying to forge accountability. Asking now for verification is to somehow save themselves. It should not be allowed now when Kasekende resisted it despite AG wanted it. In fact direct beneficiaries were largely Justine Bagyenda, Kasekende and Benedict Sekabira,” he said.

The official said his boss John Muwanga who is the Auditor General (AG) has declined to touch any crane bank documents until he gets clearance from parliament, even though the MPs talked to said they finished their work after they debated Committee on Commissions, Statutory Authorities and State Enterprise (COSASE) report.

“Ask yourself if indeed BoU injected 478 billion in Crane Bank, why did they sale it? This money was enough to restore the financial position to required standards. Big question who benefited from this

Who had taken those documents? Why did they hide crane bank documents?” Muwanga days ago rejected fresh requests to carry a fresh audit on the Shs478 billion the central bank alleges to have injected in Crane Bank after the takeover.

In a letter dated March 11, 2019, Kasekende wrote to AG requesting for the said inquiry but Mr. Muwanga in his reply dated April 4, 2019 to Dr. Kasekende said he couldn’t carry out the verification because the report on the same subject was already with the Speaker.

“Regrettably, I am unable to undertake the verification since the report has been issued to the Rt. Hon. Speaker of Parliament on February 18, 2018. Any additional verification on the already issued report can only be undertaken with the authority of parliament. We will keep the documents and wait for further communication from COSASE” reads Mr Muwanga’s letter which was copied to the Speaker, Rebecca Kadaga and the chairperson, Committee on Commissions, Statutory Authorities and State Enterprises (COSASE).

Kasekende had requested the AG to undertake a verification of documents that had not been availed during the audit.

During the probe, Dr. Kasekende said when they put CBL in receivership, they acted as lender on side and borrower on the other side, something the then Committee Chairman Abdu Katuntu said created controversy in terms of accountability and transparency.

The MPs argued that BoU officials should have used a private or official receiver to manage CBL instead of doing it themselves. Interestingly BoU wants CBL shareholders to refund the Shs478 billion yet they did not enter into any contract with CBL’s shareholders.

CBL shareholders led by Sudhir Ruparelia told the probe that they would not pay that money since they don’t know where it came from, who received and how it was used. BoU officials have no documentation about the use of the money. CBL needed Shs157 billion to stay afloat even as BoU spent Shs478 billion on its liquidation.

BoU on the other handed has not presented any accountability of the money it says it spent as liquidity support to CBL as well as other service costs related to its liquidation.

 

Katuntu, his deputy consulting lawyer Medard Segona (file photo)

The probe of BoU by the MPs was a result of the Auditor General John Muwanga’s report on commercial banks which faulted BoU for the closure of banks without following proper guidelines. Some of the other banks closed include; Teefe Trust Bank, Global Trust Bank Uganda, International Credit Bank, Cooperative Bank and Greenland Bank.

AG report on did a special Audit Report on the Shs478 Billion Injected into CBL by Bank of Uganda and it pinned the central bank officials for failure to account for Shs478 billion.

The Auditor General Muwanga carried out the audit as ordered by COSASE on December 20, 2018.

BoU officials during their exit meeting with COSASE failed to account for Shs478 billion they say they spent as liquidity support and other intervention costs on CBL receivership between October 20, 2016 and January 25, 2017.

Muwanga in the report released on August 27, 2018, says out of Shs478 billion injected into CBL, a sum of Shs157.9 billion had been recovered from Dfcu Bank and CBL Non-Performing assets leaving an outstanding balance of Shs320.8 billion at the time of writing the report. CBL at the time was sold to Dfcu Bank while it only needed about Shs157 billion to remain afloat.

However, Muwanga noted in the report that much as BoU has a financial crisis management plan which provides for decision-making in the event of a systemic shock to the banking sector, the plan does not provide the process of injection of liquidity support to financial institutions during the statutory management period like it happened with CBL. MPs told BoU Governor Emmanuel Tumusiime-Mutebile and his staff who were appearing before COSASE to ensure that the loophole is closed.

According Muwanga in his August 27, 2018 report on seven defunct banks, BoU presented about Shs466.6 billion as money injected in CBL as liquidity support but in his scrutiny of documents, he established that about Shs459.50 billion was spent for this purpose, leading to a variance of Shs7.1billion.

Dr. Kasekende told COSASE that the money was spent as; telegraphic transfers (TTs) and LC payments, Real Time Gross Settlement (RTGS), clearing and cash requirement requests.

An extra Shs12.2 billion was also spent on service providers including MMAKS Advocates who pocketed about Shs4.2 billion. The latest report on Shs478 billion spent on CBL did not however audit the Shs12 billion paid by BoU to service providers, reasoning that it was extensively dealt with by the MPs.

SOURCE: Trumpet News

 

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