KAMPALA – President Museveni blocked an attempt by Finance Minister Matia Kasaija to obtain a Cabinet memorandum to stop the ongoing Parliamentary inquiry into Bank of Uganda over unilateral closure of commercial banks.
According to emerging press reports, the president who chaired Monday’s Cabinet meeting spanned into an attempt by Mr. Kasaija to seek Cabinet protection of Bank of Uganda, with the minister reasoning that inquiring into its affairs would negatively affect the financial sector.
But President Museveni reportedly told Cabinet that he would not protect officials at the central bank being undressed before the Parliamentary inquiry because he tried to restrain them from closing Sudhir Rupareria’s Crane Bank Limited but they refused to listen to him.
“I advised those people (BoU) against closing Crane Bank. I even went on to suggest that we carry out a silent investigation but they refused. Let parliament do its work and let them face the music,” the president reportedly told Cabinet.
The Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) is conducting an inquiry into the conduct of Bank of Uganda and it’s officials in the closure of seven banks, with some of the actions ending up in massive controversy.
The MPs inquiry is also focusing on the mismanagement of closed banks by BoU after the Auditor General Mr John Muwanga issued a stinging criticism of the central bank in a special audit that cited massive flaws 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 the sale of Crane Bank Ltd (CBL) to dfcu (2016).
All the former directors of the above-closed banks will also be cross-examined by the committee.
Some of the Bank of Uganda officials including the former executive director for Supervision Ms Justine Bagyenda, a key figure in the central bank’s drastic closure and handover of Crane Bank to dfcu Bank in 2017, have had a torrid time before the committee.
So far, Ms Bagyenda and Mr Benedict Ssekabira, the director of Financial Markets Development Coordination, have been carpeted after they failed to present evidence of reports on how the value of assets of three closed commercial banks assessed so far, was reduced from Shs117b to Shs98b after the Central Bank took over the liquidation.
President Museveni indicated in Cabinet that he was upset after the central bank officials refused to listen to Mr Sudhir, one of the president’s key allies from the Asian Community and went on to close his bank under the disguise of non-performing loans.
The Auditor General Mr. John Muwanga in his report faulted BoU for selling off some of Crane Bank’s assets and liabilities when they had the chance to revive it, most especially that BoU claims it spent Shs478.8 billion on the bank during its takeover. Mr Muwanga in his report says he doesn’t understand why BoU spent all that money on Crane Bank and later sold it to DFCU Bank at a paltry Shs200 billion.
“I noted that BOU did not carry out a requisite valuation of assets and liabilities of the three defunct banks (GTB. NBC and CBL) resolved using the purchase and assumption arrangement at the time of signing the P&A. In absence of the valuation and or documented evaluation of alternatives and assumptions used, I could not establish how the terms for the transfer of assets and liabilities in the P&A were determined,” Muwanga’s report reads in part.