KAMPALA – The embattled former director for commercial banks supervision, Ms Justine Bagyenda, bypassed the Bank of Uganda (BoU) Board and sold Global Trust Bank (GTB) to DFCU Bank in 2014.
The revelation was made on Thursday by BoU officials during the parliamentary inquiry into the controversial sale of seven commercial banks by the Central Bank. The inquiry is being handled by the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE).
Ms Susan Kanyemibwa, the Secretary Board Affairs at BoU, told the committee headed by Mr Abdu Katuntu that Ms Bagyenda signed a Memorandum of Understanding (MoU) with DFCU in 2014 to sell GTB yet the BoU board had never discussed the matter nor been consulted.
She presented before the committee minutes of the board meetings between January and December 2014 indicating that the matter was never discussed. Evidence before the committee indicates that BoU closed GTB on 25th July and sold it to DFCU 15 days after.
However, in defence, Ms Bagyenda told the MPs that when taking a decision on troubled institutions like GTB, it is the bank senior management comprising the Governor, Deputy Governor and director banks supervision that meet and take decisions without taking minutes.
“When an institution is a troubled institution like GTB, there are confidential discussions between the Governor, Deputy Governor and EDS which are not minuted,” Ms Bagyenda said.
However, the MPs overruled Ms Bagyenda, saying the MoU with DFCU violated Section 40(3) of the BoU Act that stipulates that the bank shall not publish, disclose any information regarding the affairs of a financial institution unless the consent of the institution has been obtained.
Ms Bagyenda also failed to table procurement guidelines showing why BoU selected DFCU as the buyer for DFCU.
“For you to have signed this confidential agreement that includes DFCU as a potential acquirer, I think you disclosed the financial standing of the bank they wanted to acquire. This business of Ms Bagyenda committing a bank is not only irregular but illegal. She disclosed confidential information of a bank to a competitor whom she eventually sells the bank to,” Mr Katuntu said.
The BoU Legal Counsel, Ms Margaret Kaggwa, also told the Committee that Ms Bagyenda illegally entered the central bank into a MoU with DFCU as her signing contravened the BoU Act.