Uganda: Who Said What On First Day of Bou Probe

Bank of Uganda (file photo)
2 November 2018

Abdu Katuntu [Bugweri County MP & Chairman, Cosase]: This process is going to be handled in the most professional manner. It is going to be handled in accordance with the Constitution.

I know there is a lot that has been happening in the media but that will not distract us and it will not unduly influence this process. I will also like to request the media - at least the mainstream media - please be accurate with your reporting. It will be a disservice to this country if the media misrepresents what has transpired in this committee. I would like to assure everybody that we shall do as much as possible to come up with a product that can benefit the sector and the banking industry.

Secondly, Cosase took a strategic decision at the beginning of our term which is going to end soon and the decision we took, we communicated it to you people when you first came here. That our process is to help institutions improve and institutions to work well.

This Committee may not exactly be like those you have appeared before. The more reason why we have established a practice that when we are meeting institutions, we meet both management and Board of Directors (BoD) because sometimes we have realised that there is a disconnect between management and BoD of institutions. We want to be on the same page.

Thirdly, I think the first success we have registered about this process is that there is public debate which is good for the banking industry and the institution. We would like to focus on the issues as raised in the AG's report and any other institutions incidental thereto. I would like all of us to get comfortable that this is a very legitimate process. And we also know the sensitivity of the institution we are dealing with. We know the sensitivity of this institution to the economy.

I have not had an interaction with my colleagues to see whether they have internalised the responses.

From my perusal, Governor I don't see any supporting documents to the responses. What I see is a narration. We agreed when we first meet that all responses should be supported by documents because it is no use to come with a narration as it is now without supporting documents. We shall also handle that. There is no single document attached to the response.

If there is a response, there are documents attached, we look at them and we see whether we can drop that response or carry it forward. That is when we can get satisfied that the response you have made is correct and supports that particular averment. Documents should be forwarded to us in advance and then we read them. We cannot have a meaningful conversation without documents' quick perusal of this response.

Governor, I also see that there is some kind of a disagreement between the bank and the report. And when there is a disagreement, then you need to prove it.

For example, they say that the documents were provided to the Auditor General yet in some instances, the AG says they did not have access to the documents. I expected them to say that documents ABC were sent to the AG and then you attach the documents.

We are going to consider these banks in order.

From my record, from the AG's report, Teefe Bank was closed in 1993 and we will start with that. International Credit Bank (ICB)Ltd closed on December 18, 1998, Greenland Bank April 1, 1999, Cooperative Bank, National Bank of Commerce (NBC) and Crane Bank.

We are going to take them in that order because I see a lot of misconception that this process is about a particular ban and I want to make this categorically clear that we will go in that order.

The bank people are talking about is actually the last.

The objectively of this process eventually is to see, God forbid, that if there is any bank that could go under, could it be handled better.

And I am sure the operating banks now could be interested in this process that in case things get wrong, will those institutions be handled better and in accordance with the law.

Mbabali Muyanja (Bukoto South NRM): From the communication, you mentioned the sensitivity of this institution, I am of the opinion that since it is so sensitive and considering the gravity of the matter, we should debate all the audit queries behind closed doors to avoid all the speculation that may occur. Secondly, under Rule 72, any subject which is still in court, we should avoid taking that route under the subjudice rule so that we are not caught in that area.

Katuntu: You did say that in order to avoid speculation, we should consider issues in camera. That will fuel speculation instead.

There will only be reasons put on table on whether there should be an issue to be considered in camera and we shall take a judicious decision after evaluating that issue and see whether it is an issue that can be considered in camera or in the open.

Parliament is an open place. It would be wrong to start on the principle that we are going to hide somewhere and start discussing issues of national importance.

About subjudice, do you know the issues which are in court? The rules are very clear on how the rule can be invoked and who can interpret it. The rule says in the opinion of the Speaker and there is a Speaker here and he will interpret it.

Elijah Okupa [Kasilo County, FDC]: You stated that we are going to start chronologically from Teefe Bank upto Crane Bank. Don't we need some of the board members who were at BoU at the time those things took place. I know this team here is in-charge but now that issues of accountability may date back to that time, my request is that use your office through the Governor to call some of the staff who were present at the time.

Katuntu: The responsibility of answering is with BoU. They will bring whoever they so wish. However, if they think that there is some other person whom we require to answer, we will know and they will bring the person. The bank should work on records like all other government institutions.

Moses Kasibante [Rubaga North, Independent]: There is lots of documentation in front of every officer here. I would like to propose that we can proceed that when times comes to look for certain documents, we can look for them. As far as I know, BoU as an institution with economists and they must know what accountability means.

Katuntu: I want to agree with your last assumption that BoU is full of professionals who should know what accountability is. But members, we need to take this process seriously, let the documents be with you, read and analyse them.

We will give them time within which they should produce. But as you know, we don't have all the time. The tenure of standing committees of Parliament including this one ends at the end of the year. We should finish whatever business we started.

Beatrice Anywar [Kitgum Municipality]: It is unprecedented that BoU is not accompanying submissions with supporting documents. In light of that, I was requesting that it should be provided so that we can compare notes before we can proceed.

Katuntu: The Governor has noted that. I will rule on the time.

Anita Among [Bukedea District, Independent]: When they are giving us the documentary evidence, we will also require the policies, procedures ad manuals for opening commercials banks and closing them because that will guide the committee on the procedures that were closed. And the board members and shareholders of all the closed banks.

Katuntu: I actually instructed the Clerk to write to the Governor. Communication which requested you to give us the entire list of people who were seating on the boards of those defunct banks starting with Teefe. Give us the names and we will use our system to trace them wherever they are.

Among: At the time BoU had board, we would also require meetings of those minutes on those closed banks.

Governor: We will definitely try to answer those questions by providing the responses. We will try and provide the documents required to answer those questions. And in fact, we have some but we didn't... can I ask you to allow the Acting Executive Director Supervision to tell us what he has.

Kenneth Egesa [Acting Director, Commercial Banks supervision]: We have carried most of the documents that are alluded to. We have carried with us one copy on most of the documents that are alluded to but we can certainly make copies for every member during the time that you will have given us.

Katuntu: It is no use to carry documents and you have them there. The people who should be looking at these documents are MPs and they need time to go through them.

Abraham Byandala [Katikamu North, NRM]: I want the list of points you consider in closing a bank.

Katuntu: They could have different styles of answering. When I look at the AG's report, there is a table there.

Okupa: When I look at the AG's report, he has listed the type of documents that need to be provided and which were not provided. The Inventory report of closed banks, loan schedules, customer deposit schedules, statement of affairs, reports on assets and liabilities on closed banks. These are the types of documents we want and these apply to all

Katuntu: The point he is trying to make. A query is a query. If you are responding, answer the query such that a document answers the query. When you look through here, some of the documents do not answer the query. .

Among: We would like to provide information before takeover and after take-over and this will help us determine the movement of transactions.

Katuntu: Let me give an example, if you look at Page12 of their responses, failure to provide a statement of affairs by NBC and the response is BoU has been restrained by interim order. So get us the interim order.

Louis Kasekende [Deputy Governor]: On the issue raised by the Hon on loan schedules and customer deposit schedules, we need to be guided because there is a level of confidentiality on customer information. You have requested for this information but there is a limit on which information we can provide on customer deposits.

Katuntu: I agree with you. Where you have a legal limitation, bring it to our attention, we examine the law and make a ruling accordingly.

Kasekende: If someone is servicing their loan that is not information that will come.

Okupa: For banks that were closed, can we have reports from the bank supervision department so that we know how they were performing atleast for two years before they were closed. If a bank is closed in 2018, how was it performing in 2016 and 2017?

Mutebile: I can ask the staff to begin. I will make a few remarks and then I will ask the supporting staff to take us through the matrix.

Katuntu: We will not receive that matrix until we receive the supporting documents.

Mutebile: Some of them are here.

Katuntu: And how are we going to interrogate the documents and have a conversation? You only have a copy for the Chairman and members do not have copies.

Mutebile: Then we adjourn

Katuntu: Make your opening remarks. I have already guided that we need the documents before we can through the matrix

Mutebile: I have nothing to say.

Katuntu: You have to wait until when they start

Mutebile: Yes.

Katuntu: Governor Mutebile says he can make the remarks when they are ready with the documents

Mutebile: Quite frankly, it is impossible to reply to these remarks today.

Benedict Sekabira[Director,BoU]: I just want clarity on the documents. There are so many places in the matrix where we say that these documents were sent to the Auditor General. Do we provide evidence of passing over or we provide the set that we provided to the AG.

Katuntu: You will have to give them over to us.

Sekabira: It can't be done in a day.

Katuntu: We said a day because you gave an impression that you have them and colleagues are saying you go and photocopy them. How much time do you need?

Mutebile: I would say that you give us two working days-Friday and Monday.

Katuntu: That is given.

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