Senior BoU officials to face MPs as probe into sale of Crane Bank, six others starts

Emmanuel Tumusiime Mutebile, the Governor Bank of Uganda (Centre) with Justine Bagyenda, the BoU Executive Director in charge of supervision at Parliament. BoU officials will on Wednesday appear before the House to answer questions regarding the of some banks. (FILE PHOTO)

KAMPALA– Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) are on Wednesday set to begin investigations into how the Central Bank handled the controversial sale of Crane Bank and six other commercial banks.

On table before the committee is a special Auditor General’s report, which was compiled on the orders of the Speaker, Ms Rebecca Kadaga following outcry that the Bank of Uganda (BoU) could have irregularly sold off Crane Bank, Teefe Bank, International Credit Bank Ltd, Greenland Bank, The Co-operative Bank, National Bank of Commerce and Global Trust Bank.

The 94-page report indicates that BoU did not follow any guidelines/regulations or policies in the sale of Crane Bank to dfcu Bank last year and in the closure of the other banks. The AG, Mr John Muwanga, also said the Central Bank did not carry out an evaluation of the assets and liabilities of Crane Bank before they were transferred to dfcu Bank.

And now as part of their investigations, the MPs are expected to summon several BoU officials such as Governor Emmanuel Tumusiime-Mutebile, his deputy Louis Kasekende; former BoU director-in-charge of banks supervision, Justine Bagyenda and the dfcu managing director, Mr Juma Kisaame.

Committee chairperson Abdu Katuntu on Tuesday evening confirmed that the probe will start immediately.

“We are going to meet as a committee and plan how to scrutinise the Auditor General’s report,” Mr Katuntu said.

The AG’s report has also raised questions on how BoU signed a Purchase of Assets and Assumption of Liabilities agreement with Dfcu on January 25, 2017, for the purchase of Crane Bank.

“I was not provided with the negotiation minutes leading to the P&A agreement. In the absence of the minutes, I could not determine how BoU selected the best-evaluated bidder and how the terms in P& A were determined. I also noted that the P&A did not have complete details of assets and liabilities transferred to dfcu with their corresponding values; I was, therefore, unable to establish the status of assets and liabilities transferred to dfcu,” the report adds.

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

The AG has also questioned the source of Shs478.8b the Central Bank injected into Crane Bank in 2016 to keep it liquid.

MPs are also expected to quiz Mr Mutebile on how BoU paid billions of shillings as consultancy fees to several law firms in the sale of the banks. For instance, in the period when BoU was managing Crane Bank Ltd, it said it used Shs4b in the hiring of two external law firms – MMAKs (Shs3.9b); Cohen and Collins Solicitors and Notaries (Shs17.4m). However, the AG indicates the budget for MMAKS Advocates and AF Mpanga Advocates – the external lawyers hired by BoU in Crane Bank case before court kicked them out over conflict of interest, was never disclosed.