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SHOCKING! MPs fail to trace buyer of three banks closed by BoU

Investigators into the controversial sale of commercial banks by Bank of Uganda (BoU) have hit a snag failing to trace information about one of the companies that bought three banks (PML Daily PHOTO)

KAMPALA – Investigators into the controversial sale of commercial banks by Bank of Uganda (BoU) has failed to trace information about one of the companies that bought three banks.

The banks in question are International Credit Bank Ltd (1998), Greenland Bank (1999) and the Co-operative Bank (1999), which were bought by Nile River Acquisition Company (NRAC), a Mauritius-based Company that is now defunct.

However, the government does not have any records of the buyer. According to Daily Monitor, NRAC, which bought the residual portfolio (assets and liabilities) of the three closed banks in 2007, was incorporated in Mauritius on September 26, 2007, as a global business, the same year BoU officials sold the assets of the three banks, raising further controversy about the sale.

The Monitor adds that the total loan portfolio of the three banks sold to NRAC stood at Shs135b, including secured loans of Shs34.5b which had valid, legal or equitable mortgage on the real property.

The Auditor General, Mr John Muwanga, in his special audit report to Parliament has questioned this transaction and wondered why loans which were supported with legal documentation were sold to NRAC at 93 per cent discount.

However, Ms Charity Mugumya, the BoU director communications, said because NRAC bought a loan portfolio, which was difficult to recover, it paid a low price for the loans and a large share of the nominal value of the Shs135b of assets sold to NRAC accounted for accumulated unpaid interest which was not secured by any property.

It is some of these revelations that will a subject of investigations into the controversial sale of seven commercial banks by BoU, among them Crane Bank Ltd owned by business tycoon Sudhir Ruparelia.

According to the Uganda Registration Services Bureau (URSB), any foreign company must register locally before it can be allowed to transact business in Uganda.

Last week, Parliament’s COSASE chaired by MP Abdu Katuntu (Bugweri, FDC) asked the BoU Governor, Mr Emmanuel Tumusiime-Mutebile and his deputy Louis Kasekende to name the directors of NRAC and table documents on the transactions with them.

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