Audit firm Price Waterhouse Coopers (PwC) will be summoned to appear before the inquisitive Committee on Commission’s Statutory Authorities and State Enterprises (COSASE) to explain how they arrived at the Shs239Bn undercapitalisation figure that led to closure of Crane Bank Limited (CBL), the committee chair Abdul Katuntu said.
“That document was written by PwC and PwC will be called to explain.” Katuntu said after Bank of Uganda officials failed to inteprete parts of the report authored by the audit firm. BoU officials also failed to explain the extent of Crane Bank’s undercapitalization when the Central Bank took it over on 20th October 2016.
Price Water Coopers was the audit firm that was contracted by BoU to carry out an inventory of the assets and liabilities as well as a forensic audit of Crane Bank upon its takeover.
Rubaga North MP, Moses Kasibante noted that CBL never refused to recapitalize and there were engagements on how to get lending from BoU. He said Crane Bank shareholders asked BoU to reduce g interest rate from 5% to 2%, but BoU took over the bank without a response.
“CBL shareholders had contributed Shs27bn to recapitalize; BoU had requested CBL to recapitalize by end of October and BoU closed [Crane bank] before the end of the month,” Kasibante said. This was after CBL shareholders requested to borrow from the Central Bank.
Benedict Ssekabira, Director Financial Markets at BoU revealed that the request was for liquidity support not capital.
“The lending doesn’t translate for capitalisatiomn. The request was for 115.4M USD. At the time, we read the law under which BoU can lend. BoU can only lend 20% of its core capital, we were limited even with that limitation, BOU approved a facility and it had to be secured, we asked for collateral from Crane Bank, we didn’t get it,” Ssekabira said.