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.
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