Kampala — A day after former shareholders of National Bank of Commerce raged over what they called "illegal closure" of their bank, new details from the on-going inquiry into closed banks show that the bank was sold on phone.
Information before the Parliament's Commissions Statutory Authorities and State Enterprises Committee show that before Crane Bank managers signed a confidential deal with Bank of Uganda on September 27 2012, they (BoU) first called the then Managing Director CBL, Mr A.R Kalan and requested him to take over the assets and liabilities of NBC.
Although NBC shareholders led by businessman, Amos Nzeyi, Amama Mbabazi and others were busy looking for Shs7b to recapitalise their bank as instructed by banks supervision boss, Ms Justine Bagyenda, MPs heard that BoU officials were busy calling CBL MD to make ensure that by Monday October 1 2012, NBC clients freely maintain deposit accounts in Crane Bank or withdraw their deposits.
After BoU called CBL, Kalan reluctantly accepted to take over NBC but refused to buy any assets or liabilities of NBC worth Shs21.7b. After haggling, Crane Bank later agreed to take over only deposits (Shs9.5b), Treasury bills (Shs8.7b) and Secured Loans (Shs298.3m). Other assets worth Shs12.4b remained with BoU.
According to details in the purchase of assets and assumption of liabilities signed between Crane Bank and Bank of Uganda, CBL had agreed to take over NBC land valued at Shs400m. However, attempts to force the sale to Crane Bank at a discount failed given the fact that CBL is now under receivership.
"BoU management explained that the forced sale value was Shs310m.
However, because of the  court injunction, the sale was never consummated nor did physical handover to CBL take place. Given that CBL is now under receivership, the asset will revert to NBC and will be dealt with once injunction is lifted," the August 2018 report of Auditor General reads in part.
The Deputy Governor, Mr Louis Kasekende, would later issue a statement explaining how BoU intervened in the bank to safeguard the deposits of NBC by taking it over and closing it and then transferring its deposits and some of its assets to Crane Bank Ltd through a purchase of assets and assumption of liabilities operation.
Mr Kasekende also explained that the assets and liabilities not transferred to Crane Bank would be placed in liquidation.
He explained that NBC had been suffering financial distress for more than two years and that since the middle of 2010 it had incurred continuous losses.
"Nearly half of its loans were non-performing. It had achieved no growth since 2008 and its market share of deposits had fallen to 0.08 per cent, far lower than any other bank in Uganda. Had it remained in operation, its losses would have continued to mount, which would eventually have depleted its deposits," Dr Kasekende said.
Although Dr Kasekende explained that BOU has made efforts to persuade NBC's shareholders to take the remedial actions necessary to restore the bank to financial viability, including resolving the shareholders' disputes, Mr Mathew Rukikaire, the chairman of Board of Directors of the NBC shareholders, told a Parliamentary Inquiry on Monday that when NBC raised the Shs7b, Ms Bagyenda instead demanded that the money be invested in treasury bills.
The former shareholders of Crane Bank led by city tycoon Sudhir Ruparelia are expected to appear before Cosase today to explain their role in NBC take over and give evidence on the controversial sale of Crane Bank Limited to dfcu.