KAMPALA – The Commonwealth Development Corporation (CDC) Group, a British firm is still stuck with its 9.97 shares in dfcu Bank after the earmarked buyer –the Danish Development Finance Institution, the Investment Fund for Development Countries (IFU) sought to inspect Bank of Uganda Board minutes regarding the purchase of Crane Bank.
dfcu Ltd, the parent company of dfcu Bank on December 19, 2019 announced that CDC Group was to sell 74,580,276 shares which make up 9.97 per cent of the total 748, 144,033 ordinary shares in the company.
However, it now understood that the demands by the Danish Development Finance Institution Danish Company IFU has stalled the deal with insiders saying the matter may come up in again in Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) for revision.
COSASE last year investigated the controversial sale of seven commercial banks between 1993 and October 20, 2016 by Bank of Uganda, with the acrimonious closure and sale of Crane Bank Ltd, owned by city businessman Sudhir Ruparelia, dominating the headlines.
CBL was placed under statutory management from October 20, 2016, to January 20, 2017, before it was controversially sold to dfcu Bank. The fallout in the aftermath of the sale led to a parliamentary inquiry, which later discovered that the BoU board did noit sit to approve the sale as per the procedures.
During the Parliamentary probe, Ms Justine Bagyenda, who was in the aftermath of the sale of Crane Bank retired as the central bank’s Executive Director for supervision told MPs that the sale of CBL to dfcu Bank was done over telephone and that there was no any minutes written to effect the sale. The same was confirmed by MMKAS Advocates who were the transaction advisers acting on behalf of BoU.
In their report, MPs said BoU officials had acted with reckless abandon 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 Crane Bank Ltd (CBL). And, in none of the above, did the BoU officials follow the due process.
The Committee noted a number of inconsistencies key among them being closure and sale of the defunct Banks without any inventory or documentation and grossly undermining the legal procedures of bank closure by the Central Bank. COSASE found out that BoU officials were not transparent and didn’t follow good governance principles in their undertakings, which was made worse by their failure to conduct their dealings without records.