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Auditor General probes BoU over Shs200 billion Crane Bank bailout

The Auditor General has started a wider investigation into the Crane Bank scandal.

Kampala.  Auditor General (AG) John Muwanga has started a wider investigation into how Bank of Uganda (BoU) spent Shs200 billion, which was used to bail out Crane Bank before it went bankrupt.

The AG probe comes on the backdrop of petitions by former Crane Bank and central bank employees who wondered why the bank collapsed despite government injecting money to keep it afloat.

In 2016, the government injected the money in Crane Bank after Cabinet ministers warned that the collapse of the bank posed a risk to the entire financial sector.

Petitioners now want Mr Muwanga to investigate the management of Crane Bank under BoU before it was sold to dfcu Bank.

Bank of Uganda Governor Emmanuel Tumusiime Mutebile cuts tape at the opening of a Crane Bank branch. Next to him is a Crane Bank share holder Mr Tom Mugenda and Ms Ruparelia: NET PHOTO

Whereas Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) has already tasked Mr Muwanga to look at the controversial sale of Crane Bank to dfcu, he has been given more time to investigate the management of Crane Bank affairs when it had been taken over by the Central Bank and then present a full report to the MPs.

The spokesperson for the AG’s office, Ms Gloria Namugera, confirmed the investigation into BoU is ongoing and a report will be submitted to Parliament.

COSASE chairman Abdu Katuntu said Mr Muwanga is already investigating the circumstances under which Crane Bank was transferred to dfcu Bank without consulting the key stakeholders.

Aggrieved Crane Bank shareholders have already threatened to sue BoU, saying the January 25, 2017 sale agreement was signed by BoU Governor Tumusiime Mutebile and Mr Juma Kisaame, the managing director of dfcu Bank, without considering the interests of major shareholders of the defunct bank.

Auditor General John Muwanga

Last month, PML Daily revealed that Crane Bank Ltd was sold to dfcu Bank by BoU at a paltry Shs200 billion without consulting the shareholders who valued it at Shs1.3 trillion.

Shadow attorney general Wilfred Niwagaba said BoU must account for the questionable funds.

BoU has recently been in the eye of the storm over its operations. The COSASE chairman also said the AG’s report is expected to furnish them with information regarding the closure of National Bank of Commerce (NBC).

Recently, Meera Investments dragged Dfcu Bank to the Land Division of the High Court, seeking to reclaim its 46 branches which it says were acquired illegally following the dissolution of Crane Bank.

The closure of Crane Bank saw Dfcu bank become the third biggest bank after acquiring 46 branches from the financial institution.

Meera, in its law suit, claims that at the time BoU took over the management of then Crane Bank in October 2016 before its eventual sell to DFCU, it was the leaseholder of the suit properties and paying $6,000 every beginning of the year.

Budadri West Member of Parliament Nathan Nandala Mafabi called for the arrest of Ms Bagyenda over money laundering.

Budadiri  West MP Nandala Mafabi

This comes after it was revealed that Ms Bagyenda has Shs19b stacked away on three accounts, making her several times richer than her former boss, Dr Emmanuel Tumusiime Mutebile, who is the highest paid salary earner in Uganda. Sources have intimated to PML Daily that the money was accumulated in six years.

“These are people who have been stealing money indirectly. When Bank of Uganda goes under, it comes to Parliament and we give it money. Instead of making sure that banks operate ethically, Bagyenda has been colluding to ensure that banks operate unethically and the taxpayer ends up losing,” Mr Mafabi said.

 

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