KAMPALA -The former shareholders of the defunct Greenland Bank have faulted Bank of Uganda for mismanaging the property of the institution and demanded 700 billion shillings as compensation.
Greenland Bank Limited operated until 1999 when the Central Bank took over its management and control, suspending the entire board of directors, including the then Managing Director, Dr Suleiman Kiggundu.
However, appearing before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises on Tuesday, the shareholders led by Mr Ahmed Nsubuga accused BoU of selling customer loans of the defunct bank at less than the value of the secured loans.
“The shareholders have been alarmed by the incredible discount of 93 percent offered by the liquidator (BoU) to buyers of the secured loans whose identity and whereabouts remain a mystery,” said Mr Nsubuga.
“The shareholders are in the dark as to what happened to the Bank, its assets and the whole process; there are no liquidator’s reports filed with the company registry with regards to Greenland bank Limited. The liquidator should provide a clear cash flow analysis month by month, year by year, asset by asset and supported liability by liability,” he added.
Mr Nsubuga presented a list of areas for accountability, among them computed residual interest worth Ushs171.6 bn and another Shs43 bn paid by Greenland Bank to privatization unit.
He also highlighted the need to recover Shs147.9 bn as of 1999 (valued at 484.4bn today), which is a computation of the total asset base of the bank at the time of closure.
“During the period December 5, 1998, and March 31, 1999, when Bank of Uganda was managing the bank, it failed to win depositors confidence subsequent to which a number of depositors withdrew their deposits which culminated into discontinuation of the operations of Greenland bank,” said Mr Nsubuga said.
The Auditor General noted in his report that in December 2007, BoU signed an agreement with Nile River Acquisition Company to sell the debt portfolio of Greenland, International Credit Bank and Cooperative banks at only 25 million US dollars (about Shs.8.9 bn.)
The shareholders highlighted what they called suspicious intrigue and fraud in the manner the Central bank handled securities for loans and advances and in the disposal of land and buildings belonging to the bank, and its sister companies.
“The shareholders have been able to hazard a financial status of their bank and are now requesting Parliament to prevail over the officials of Bank of Uganda and the official liquidators to account for all the procedures followed and proceeds of liquidation,” reads the submission in part.
The shareholders have asked the committee to task Bank of Uganda officials to explain the whereabouts of proceeds from the disposals of shares in Greenland Bank Tanzania, Kenya and Zanzibar and all other bank assets in Tanzania.