BoU officials pin Bagyenda over status reports

COSASE revelations have put embattled Former BoU Director of Supervisions, Ms Justine Bagyenda on the spot for closing banks without valuation reports (PHOTO by Nicholas B’)

KAMPALA – Senior officials at the central bank have blamed the former executive director for supervision, Ms Justine Bagyenda for clearing the closure of three commercial banks without valuation reports detailing their financial status.

Officials who were appearing before the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) on Monday that is inquiring into the conduct of Bank of Uganda and its officials in the closure of seven banks, with some ending up in massive controversy on Monday pinned Ms Bagyenda.

Ms Bagyenda was in attendance after a week of ping-pong with the MPs, blaming her for the controversy resulting from the closure of the International Credit Bank (ICB), Cooperative Bank and Greenland Bank, which breached provisions of the Financial Institutions Statute.

Cosase chairperson, Mr Abdu Katuntu, then asked Ms Bagyenda: “Did you value them (the banks)? Was there a thorough analysis of the situation? Did you make a valuation report and if so, where is it? If the BoU officials do not provide the reports, they could admit they do not exist so that the committee members determine the next course of action.”

Ms Bagyenda also failed to respond to discoveries by the Auditor General’s report which faulted the central bank for selling assets of ICB, Greenland, Cooperative, GTB and NBC worth Shs164b at a discount of 80 per cent, yielding the only Shs32b.

Without valuation reports, lawmakers on Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) questioned what Ms Bagyenda relied on to convince BoU board that the banks were an untenable financial position and ripe for closure.

Ms Bagyenda insisted that BoU hired M/S Bageine and Co., a private firm, to conduct the valuation of the banks’ assets and liabilities but she tabled no report, leaving MPs clueless on how BoU closed the banks.

“It is a long time ago and from the last week, my head has been turning around. That is why I first wanted to read. I wanted to refresh my mind so that I can give an informed answer. I have a document from the executive director (Banking) Supervision, who was me then, to the Governor (BoU). I have seen that valuation reports were made by M/S Bageine. That report should be there in the bank,” Ms Bagyenda said.

A September 25, 2007 letter signed by Ms Bagyenda titled, ‘Update on Implementation of closed banks exit strategy’, a copy of which the parliamentary committee possesses, shows that the central bank conducted what it called “desktop valuation.”

This prompted the institution to revise the loan portfolio from $10m (Shs37b) to $5m (Shs18.5b).



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