Governor Mutebile Thrown Out Of COSASE Probe For Failure To Produce Inventory For Closed Banks Again!

Governor Mutebile Thrown Out Of COSASE Probe For Failure To Produce Inventory For Closed Banks Again!

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By Andrew Irumba

Bank of Uganda (BoU) sold three of the major banks it closed at 93 per cent discount and to a now defunct offshore company registered in Mauritius, a tax haven without an inventory, TheSpy Uganda reports!

On Monday, Governor Bank of Uganda (BoU) Prof.Emannuel Tumusiime Mutebile, his deputy Lousi Kasekende and other BoU officials told Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) that some of the Banks like that was closed in 1993 were closed under the 1964 bank laws which didn’t require them to have an inventory.

They also told the Katuntu led parliamentary committee that Bank of Uganda (BoU) has no guidelines on how banks are opened or closed!

“Bank of Uganda has no guidelines on how banks are opened or dissolved, we’re in process to get one,” Dr.Tumubweine Twinemanzi, BoU’s director in-charge of supervision told members of COSASE on Monday.

Mr.Chairman We don’t have the inventories and the law didn’t ask for such: Confessed BoU Director supervision Dr.Tumubweine Twinemanzi! (Photo credit: Courtesy of NTV)

This revelation raised a lot of questions from honourable members like Francis Mwijukye (Buhweju), Ssewungu Gozanga (Kalungu west) and Moses Kasibante (Rubaga North) as how BoU reached an agreement to sale the seven banks without knowing what they were selling, they wondered how they reached a conclusion to know the banks were doing bad when they didn’t have documented evidence.

Accordingly, the no-nosense Chairman Abdul Katuntu,also MP Bugweri East asked them to excuse themselves out of the committee so they can go [early] and look for the documents and ensure they produce them on Wed.afternoon before the committee resumed on Thursday morning at 10am. “Ensure those documents are received by the chairman of the committee by lunch time on Wednesday,” Katuntu ruled.

In his submission, the Governor BoU Emmanuel Mutebile ‘reminded’ the committee members of the privacy policy for some documents that the committee was asking for, though he didn’t specify whether the inventories were among the documents under water tight security.

However, in his response, Katuntu assured the Governor that any document deemed to be highly private and secret will be treated as such by the committee chairman, and that he didn’t need to worry. He also warned him to close gaps at BoU where sensitive information is being leaked by his very own staff.

BoU Governor Prof.Emannuel Tumusiime Mutebile and his Deputy Louis Kasekende were recently ordered to appear before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) to explain the alleged anomalies in the sale and closure of Crane Bank and six other commercial banks.

The mighty professor Mutebile and Dr.Kasekende are expected to answer queries raised in the Auditor General’s forensic report submitted to Parliament recently that faulted their administration on a number of issues especially on how they handled the Crane Bank,DFCU transition and the closure of six other banks.

The Chairperson COSASE, Hon.Abdu Katuntu, while issuing the summons recently said they would leave ‘no-stone un turned’.

“We shall be able to interact with officers and the board of BoU to explain to us the issues that were raised by the Auditor General in his report. We are inviting the board, that means the Governor and Deputy Governor. Both board and management are headed by the Governor and Deputy Governor,” Mr Katuntu said.

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.

The MPs are also expected to summon former BoU director-in-charge of banks supervision Justine Bagyenda and DFCU’s out going Managing Director Juma Kisaame. Now added on the list are the former directors of Teefe Bank. These are required to explain on whether indeed there was no inventory they signed as well when BoU was taking over their bank and other information relevant to the committee.

The AG’s report 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 former managing director of DFCU Bank without considering the interests of major shareholders of the defunct bank.

The AG 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.

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