BUSINESS

Auditor General finds missing Shs23 billion in BoU probe

The sale of defunct Global Trust Bank asserts has raised eyebrows at the Auditor General’s office.

The Auditor General has faulted Bank of Uganda (BoU) for failing to account for Shs23b accruing from the sale of Global Trust Bank (GTB) in 2014, PML Daily has learnt.

The Shs23 billion is in form of bank assets, which included deferred tax, intangible assets, cash balances, amounts due from other banking institutions other assets, amounts due from group companies, property and equipment, intangible assets, and deferred tax.

The report is a result of the investigation directed by the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), which in March directed the Auditor General, Mr John Muwanga, to conduct a broader investigation into the management of BoU over the circumstances into the sale of several banks, among them Crane Bank.

Auditor General John Muwanga was asked to probe further into BoU transactions.  

And now in the draft report seen by this website, the Auditor General also indicates that the closed bank’s 25 land titles were not transferred to dfcu Bank when the latter acquired the bank after it was declared insolvent.

“BoU did not transfer these titles to the purchaser (dfcu) contrary to the agreement. Management should place caveats on all the lost titles to protect the property and ensure that the titles are recovered and handed over to dfcu,” the audit report reads in part.

The report indicates that by December 2017, BoU had also not settled claims of former GTB shareholders worth Shs1.2b.

“Failure to settle verified claims delays the winding up process, hence BoU incurring liquidation and management costs, thereby reducing residual benefits due to the shareholders,” the audit report warns.

The report indicates that BoU sold 79 per cent of the loans it acquired from International Credit Bank, Cooperative Bank and Greenland Bank in 2007 despite selling off the banks in 1998 and 1999.

“Best practice requires that the primary goal of the banks forced [into] liquidation is to sell off the assets and meet the claims of liquidated banks’ creditors in a short period of time. Due to delays, it was difficult to track the debtors and also recover the maximum realisable amount from the portfolio,” the report says.

The report also indicates that BoU refused to provide information with the Auditor General regarding the sale of Crane Bank, National Bank of Commerce and Teefe Bank on grounds that there are cases in court regarding the closure of the three banks and any inquiry would offend the law on subjudice.

The former Crane Bank has remained a thorn in the flesh for Bank of Uganda

However, these are now under audit after the Speaker of Parliament, Ms Rebecca Kadaga, on May 10 wrote to Mr John Muwanga, informing him to proceed with the investigations into the Central Bank’s controversial closure of over seven banks, among them the locally-owned Crane Bank.

Last Thursday, a team of 15 people from the Auditor General’s office moved to the Central Bank headquarters on Kampala Road with a view to assessing the documents pertaining the closure of the banks over the years. Among closed banks include Teefe,  International Credit Bank, Cooperative Bank, National Bank of Commerce, Global Trust and most recently, Crane Bank.

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