Uganda: Probe Into BoU Starts Today

Bank of Uganda (file photo)
24 October 2018

Kampala — The lawmakers on Parliament's Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) will today kick-start investigations into irregular operations at Bank of Uganda (BoU) including glitches in the closure and controversial sale of at least seven commercial banks.

The Committee will be guided by a forensic report by the Auditor General which lifted the lid over wrongdoings at BoU ranging from unaccounted for money, missing land titles, disputed payments to external lawyers and customer loans that were inherited from closed banks and sold at an undervalued rate without justification.

The audit report that was submitted to Parliament last year questions BoU officials in relation to 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) at Shs200b.

Auditors discovered that assets worth Shs23b formerly owned by GTB were not transferred to dfcu in the purchase and assumption agreements when the bank was closed in July 2014. The assets included cash balances (Shs6.6b), amounts due from other banking institutions[Shs2.3b], other assets (Shs5.1b),amounts due from group companies (Shs9m), property and equipment (Shs5.6b),intangible assets(Shs758m) and deferred tax (Shs2.4b).

Auditors failed to trace Shs9b that was taken from other banking institutions as indicated in the inventory report but was not be reflected on the recovery account. The Committee chairperson, Mr Abdu Katuntu (Bugweri County), yesterday confirmed that Cosase will hold a preparatory meeting today and promised that the investigations will leave no stone unturned.

"We are going to start from where we ended last year. We are going to meet as a committee and plan how to scrutinise the Auditor General's report sent to us by the Speaker including the special audit into Bank of Uganda," Mr Katuntu said without giving details on who will be summoned first.

The committee is expected to summon various stakeholders including Governor Emmanuel Tumusiime-Mutebile and his deputy Louis Kasekende; former BoU director in-charge of banks supervision, Justine Bagyenda; the dfcu managing director, Mr Juma Kisaame, and the former owners of closed banks.

Finance minister Matia Kasaija will also be summoned over the sale of closed banks.

Sources told this newspaper that the investigation into BoU delayed because of "a tug-of-war" over the manner of inquiry, with Budadiri West MP Nandala Mafabi, who moved a motion calling for a select committee into the allegations of "deal making" in the closure of seven commercial banks.

In the report, auditors reported that they failed to trace Shs9b that was taken from other banking institutions as indicated in the inventory report, but was not reflected on the recovery account.

The Auditor General has also faulted BoU officials for selling Crane Bank assets and some liabilities to dfcu bank without valuation.

Mr Moses Kasibante (Rubaga North), a member of the Committee, said they intend to carryout a wide-range probe that will handle the sale of Crane Bank and specifically the role of Ms Bagyenda.

Mr Kasibante dismissed the subjudice flag previously raised by some BoU officials as a ploy to frustrate accountability.


The Audit report also questions why BoU sold 79 per cent of the loans it acquired from International Credit Bank, Cooperative Bank and Greenland Bank in 2007 despite having closed the banks in 1998 and 1999.

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