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BoU officials face MPs again over Crane Bank controversy

Bank of Uganda officials return to Parliament as COSASE proceeds with the inquest in undercapitalisation and controversial sale of Crane Bank to DFCU Bank (FILE PHOTO)

KAMPALA – The Bank of Uganda top officials return to parliament on Wednesday morning as the inquest into the controversial transfer of Crane Bank to dfcu Bank takes centre stage.

The central bank in October 2016 closed Crane Bank, previously one of the best performing banks before controversially selling it dfcu Bank in January 2017 for a paltry Shs 200 billion.

On Thursday, Mr Katimbo Mugwanya, a former director at BoU who was appointed Statutory Manager for the sale of Crane Bank, admitted that he had bungled up the calculations on how the money that was injected in Crane Bank was calculated, leaving the committee with no option but to adjourn the hearing to Wednesday.

Governor Mr Emmanuel Tumusiime Mutebile told MPs that he that he did not have figures regarding Crane Bank’s undercapitalisation but was contradicted by Mr Benedict Ssekabira, the Director Financial Markets Coordination, who said Crane Bank required a further injection of Shs157b for it to remain afloat.

On the other hand, Ms Justine Bagyenda, who was the executive director of commercial banks supervision when Crane Bank was closed, indicated that the bank required an additional capital of at least Shs32b by September 15, 2016, and progressive capital of Shs56b if capital adequacy was to be restored by October 31, 2017.

Embattled former BoU Director of Supervision, Ms Justine Bagyenda and Director for Financial Markets Development Coordination, Benedict Ssekabira (R), during the probe hearing. (FILE PHOTO)

The Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) is conducting an inquiry into the conduct of Bank of Uganda and it’s officials in the closure of seven banks, with some ending up in massive controversy.

Ms Bagyenda, a key figure in the central bank’s drastic measures now under review is considered a prime witness, having been behind the drastic closure and handover of Crane Bank to dfcu Bank in 2017, before the fall out forced her out of the central bank.

The MPs’ inquiry is also focusing on the mismanagement of closed banks by BoU after the Auditor General Mr John Muwanga issued a stinging criticism of the central bank in a special audit that cited massive flaws in the closure of Teefe Bank (1993), International Credit Bank Ltd (1998), Greenland Bank (1999), The Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and the sale of Crane Bank Ltd (CBL) to dfcu (2016).

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