KAMPALA – The Committee on Commissions, Statutory Authorities and State Enterprise (COSASE) has tasked the former Executive Director Banking Supervision at Bank of Uganda Justine Bagyenda to work alongside the current team at Bank of Uganda, to produce documents relating the sale of Global Trust Bank.
The directive was issued by COSASE Chairperson, Abdu Katuntu during the Committee probe into the procedure used by Bank of Uganda to close the seven defunct Banks.
Katuntu said: “Selling a bank isn’t like selling a bottle of water. It is a very complicated process, it can’t be a casual thing where people talk and talk and go. We want to know what experts did and we can only know when we look at the documents. You (Bagyenda) are the centre of this because you are the one in charge. The team of the bank should go back, look through. Get these documents.”
In the August 2018 Special Audit report about the closure of Banks, the Auditor General highlighted that there were no guidelines or regulations and policies to guide the identification of the purchasers of Global Trust Bank Uganda under P&A arrangement.
Yet still, the auditors also faulted Bank of Uganda for failing to provide records of the procurement process to ascertain the bid requirements, offers made, list of bidders, evaluation criteria, evaluation report and negotiation minutes leading to the P&A Agreement
In their responses, the Central Bank team argued that the circumstances of each bank resolution differ and cannot always be predicted in advance.
The Bank of Uganda team also argued that minutes of the negotiations are usually not taken due to confidentiality reasons and promised to start making a post-resolution report for record purposes.
When tasked to produce the documents, Bagyenda told the Committee that it had been long since she was at the Bank and needed more time to look through the Bank records and consult with the staff she worked with.
Bagyenda told the Committee that when the Central Bank carried out both outside and onsite examination of the bank, they found out that Global Trust Bank was persistently making losses, profitability was below the number used and its management was marred with weaknesses in corporate governance, inaccurate financial reporting.
She added that when a financial audit was carried out by KPMG, commissioned, Bank of Uganda discovered that there was no improvement in what was required of Global Trust Bank which prompted the Central Bank to close Global Trust Bank.