The D-Day Is Here! BoU Governor Mutebile, Parliament Face Off Today!

The D-Day Is Here! BoU Governor Mutebile, Parliament Face Off Today!

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By Andrew Irumba

Bank of Uganda Governor Prof.Emannuel Tumusiime Mutebile and his Deputy Louis Kasekende were last week 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 appear before the MPs today Wednesday [without fail] 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.

The chairperson COSASE, also member of Parliament Bugweri County Hon.Abdu Katuntu, while issuing the summons last week, 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 last Wednesday.

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.

                               Summoned: Governor Mutebile (R), Bagyenda (M) and Louis Kasekende.

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.

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