21 February 2019

Uganda: MPs Want Bou Staff Punished Over Commercial Banks Closure

Kampala — The call for sanction is one in a raft of recommendations contained in a report prepared by Parliament's Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) due to be tabled on the floor of the House on Thursday afternoon.

Cosase investigated Bank of Uganda (BoU) and its contested closure of seven commercial banks for nearly three months and the out-going Bugweri County MP Abdu Katuntu, who chairs the committee, is expected to table the findings in the next few hours.

He met Parliament Speaker Rebecca Kadaga on Wednesday and the duo agreed to schedule presentation of the report on the Order Paper for the Thursday sitting.

Multiple sources close to the investigations say the Members of Parliament on the committee want senior central bank officials who handled the closure of the commercial banks, and most recently of Crane Bank, must be held "individually liable" for violating the law particularly the Financial Institutions Act and Bank of Uganda Act.

Bank of Uganda Deputy Governor Louis Kasekende; Mr Benedict Ssekabira, the director of Financial Markets Development Coordination (FMDC); Ms Justine Bagyenda, the former executive director for Commercial Banks supervision; and, Ms Margaret Kasule, the legal counsel, are some of the senior central bank officials that managed Crane Bank's closure and sale to dfcu Bank.

The committee is expected to propose to the House to ask police carry out further investigations to establish whether money was lost when the central bank claimed to have injected Shs504b to prevent the collapse of banks but failed to provide evidence to support the spending of Shs25b out of the allocation.

They will, according to the sources, also ask the Inspector General of Police to "immediately seize all the land titles in possession of Mr Kakembo Katende of M/s JN Kirkland and SIL Investments; the two companies that took over the sale of a loan portfolio of closed banks that was worth Shs145b".

On Greenland Bank, a source disclosed that the report recommends that Bank of Uganda should take "full responsibility for any probable loss to Greenland Bank".

"We recommended that BoU should never resolve any financial institution without strictly adhering to the provisions of the law like the Financial Institutions Act, Bank of Uganda Act and the National Record and Archives Act," another source adds.

Though the report will be tabled on Thursday, it is not clear if lawmakers will discuss the findings and recommendations on the same day.

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