By Spy Uganda
The government of the United States of America wants President Yoweri Kaguta Museveni to take immediate action on Bank of Uganda Governor Prof. Tumusiime Mutebile, during whose reign Bank of Uganda has been named in various corruption scandals.
The development comes after a report by the US State Department noted with disappointment that it is now over a year since the parliamentary Committee on Commissions, Statutory Authorities, and State Enterprises (COSASE) released its report about the closure/sale of commercial banks by the Central Bank, but government has never taken any action on the culprits.
According to the report, the US government expressed shock that despite the findings by Parliament, no “resignations” or reprimands had been made, noting that failure to act is likely to breed a culture of corruption.
The report reads in part thus; “On February 18, the Parliamentary Committee on Commissions, Statutory Authorities, and State Enterprises (COSASE) published its findings from the 2018 inquiry into “irregular conduct” by the Central Bank in the process of taking over defunct banks and noted that the Central Bank acted irregularly in the process.”
The report also recommended that Central Bank officials responsible for the mess should account for their actions individually, right from the top management to the last staffer.
According to local media reports, MPs across political divides faulted the COSASE for not naming individuals responsible or recommending any arrests.
It should be noted that on February 19, the Inspector General of Government (IGG) asked the Internal Security Organisation (ISO) to investigate allegations that members of the COSASE had received kickbacks from officials in the Central bank.
But in March last year, the media reported that the Speaker of Parliament rejected the IGG’s request to investigate COSASE MPs and wrote that it was an attempt to attack Parliamentary investigations, “blackmail” and “intimidate” parliamentarians.
Recommendations By COSASE
In February 2019, the COSASE report on the sale/closure of commercial banks which was released in February last year called for a wide range of changes at the Central Bank. It also called for punishment of the implicated officials.
Among other things, the report recommended that contracts of the governor of Bank of Uganda Tumusiime Mutebile and his deputy, Dr Louis Kasekende should not be renewed, but although Kasekende’s contract was not renewed after its expiry, Mutebile still serves as Governor at BoU.
Apart from Mutebile and Kasekende, the COSASE report also named other officials who should be answerable in the BoU scandals among them: Benedict Ssekabira, the director of Financial Markets Development Coordination (FMDC), Justine Bagyenda, the former executive director for Commercial Banks supervision; and Margaret Kasule, the legal counsel, plus others.
“The board did not adequately supervise management in the process of liquidating the financial institutions,” reads part of the report about the sale of seven commercial banks, including tycoon Sudhir Ruparelia’s Crane Bank.
Trimming Mutebile’s Powers
The COSASE report also recommended trimming Mutebile’s powers at BoU by separating the office of the Governor from that of the Chairman Board of Directors.
The report adds that “Good corporate governance principles would require that the position of chairperson and vice chairperson of the board is separated from the position of Chief Executive (Governor) and his Deputy.”
“It is therefore the recommendation of this Committee that article 161 (4) (of the Constitution) be reviewed to separate the offices of the leadership of the board and top management of BoU.”
Fraudulent Sale Of Crane BankWhen it came to the dubious sale of Crane Bank to dfcu Bank by Bank of Uganda, the legislators reported that BoU officials committed grave negligence of duty by selling Crane Bank using underhand methods.
“The principles of legality therefore were highly compromised. This is exacerbated by the absence of minutes or any record detailing the process of arriving at the figures at which Crane Bank was sold to dfcu,” observed the MPs, further adding that failure to value the assets and liabilities of Crane Bank before selling it to dfcu was “imprudent” on the part of the Central Bank.”