KAMPALA – The probe into the circumstances that led to the closure of Cooperative Bank has unearthed questions regarding the particular identity of the bank that was closed, after two groups of shareholders came up claiming ownership of the bank, with each sharing the same names.
While appearing before the Committee on Commission Statutory Authorities and State Enterprises (COSASE) yesterday, Ivan Assimwe Secretary General Of Uganda Cooperative Alliance informed the Committee that at time when the Cooperative Bank was closed in 1999, there were two cooperative banks one created by cooperatives in 1964 and the other by individuals in 1997 and the cooperators aren’t aware of which Bank was closed by the Central bank.
When the matter was further interrogated in Thursday meeting, Hannington Wasswa, Director Commercial Banks, Bank of Uganda informed the MPs that the bank that was wound up was the second Bank, bringing questions on the legality of the second Bank since the law bars the Registrar of Companies to license any company with the same names.
Wasswa told the Committee that the Cooperative Bank that was closed by Bank of Uganda the one that had shareholders as USAID, Cooperative Movement and had no mention of the Cooperators.
Charles Owol, Secretary of Cooperative Bank informed the Committee that after the Bank started facing liquidation challenges, a decision was taken for government to acquire shares and USAID also promised to assist the Bank with a grant but demanded to have non-cooperators with funds to be brought on board.
This raised questions on why the said memorandum between Government and Cooperators wasn’t drawn by the Attorney General, as required by the law with Mbarara Municipality’s Michael Tusiime asking; “The Constitution mandates the Attorney General to be the one drawing of this agreement and not private lawyer. I want the legal regime that gave you autonomy to register another company in the name of the other one.”
He also said that as the process to register Cooperative Bank Limited was taking place to have the assets of the initial Cooperative Bank transferred to the new owners, the Central Bank closed Cooperative Bank.
COSASE Chairperson, Abdu Katuntu pushed the blame to the Registrar General saying; “There is no reason a Registrar should allow registration of an existing society what he is doing is register two companies to confuse the public. It isn’t just a name. It has gone to the core which bank was actually closed. The first confusion rose from flouting the same name and Bank of Uganda recognising this institution but the new Bank’s assets were taken over 1997.”
Auditor General, John Muwanga also spoke out on why his name came dragged into the matter saying he was appointed to the Board of Cooperative Bank by the Ministry of Finance at the time he was serving as the Accountant General explaining, “I was appointed through the Ministry of Finance that is how I ended up on the board, not I was representing the interests of Ministry of Finance. It was the Directors asked to acquire shares. They are subscriber shares and at 16th March 1999 Government ceased to have subscriber shares and later resigned as Accountant General on 31st December 1998.”