The sale of Crane Bank to DFCU Bank still continues to haunt the Bank of Uganda (BOU).

The latest is that Speaker of Parliament Rebecca Kadaga insists that the Auditor General (AG) must by all ways launch a special audit into BOU over the sale of Crane Bank and other six commercial banks.

In the letter dated May 10, 2018 and addressed to the Auditor General John F.S Muwanga, Kadaga urges that BOU has never produced any report concerning the sale of defunct banks such as Teefe Bank, Greenland Bank, International Credit Bank, Cooperative Bank, National Bank of Commerce, Global Trust Bank and Crane Bank.

Speaker Kadaga is concerned that the Auditor General Muwanga has taken long to launch investigations into BOU as requested by the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE). The committee members accuse BOU of not producing any report as regards the sale of the banks.

“The request from the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) is premised on the finding by that committee that there has never been any report by the Bank of Uganda on the defunct banks,” Kadaga says in the letter.

The Speaker has copied the letter to BOU Governor Emmanuel Tumusiime-Mutebile, the Solicitor General- Francis Atoke, the Chairperson COSASE-Abdu Katuntu and the Deputy Speaker of Parliament Jacob Oulanyah.

Kadaga said the earlier motion that was deferred by the Deputy Speaker Jacob Oulanya has nothing to do with the request by the COSASE Committee that the AG launches a special audit into the sale of the affected commercial banks by BOU. “This request by the committee is, in opinion, clearly distinguishable from the Rt. Hon. Deputy Speaker’s directive about the motion which was intended to be discussed,” she says in the letter.

Kadaga further tells the AG that the audit his office was directed to conduct has nothing to do with Bank of Uganda roles in the supervision of Financial Institutions. “Audits are processes directed by the Constitution. I don’t believe that there is any public institution created by law in Uganda that is not subject to audit,” she says.

The Speaker in her letter faults BOU for consulting the Solicitor General on that matter, saying that any institution that needs a clarification on a decision of parliament must consult with the Office of the Speaker.

“Therefore in response to your request for guidance, you should proceed with the audit as directed and submit your report to my office as is required by law,” Kadaga cocludes.

Meanwhile Members of Parliament have quashed attempts by the Deputy Governor Bank of Uganda, Dr. Louis Kasekende, to obstruct a forensic audit by the AG into the Central Bank’s role in the closure of commercial banks.

On April 19, 2018, Kasekende wrote to the AG stating that an investigative audit into BOU would go against the sub-judice rule as the case between Crane Bank and BOU is court.

The Solicitor General, Atoke, on May 2, 2018 affirmed Kasekende’s letter, concurring with Kasekende that an investigation into the sale of Crane Bank would offend the subjudice rule and therefore told BOU not to cooperate with the AG or parliament.

But Budadiri West MP Nandala Mafabi, the lead petitioner for an audit into BOU, has attacked Kasekende accusing him of attempting to protect what he referred to as a mafia at the BOU. He said yesterday that the AG must continue with the BOU investigations process to bring out the rot in its operations.

Mafabi said that in neighbouring Tanzania, Bank of Tanzania was audited by that country’s Auditor General which and grand theft. Mafabi said BoU should account for all the closed banks.

Mafabi wants the audit to focus on the conduct of Ms Justine Bagyenda, the former director of commercial banks supervision at the bank and other officials who were charged with the responsibility of carrying out routine supervision of Crane Bank.

Meanwhile the Shadow Attorney General, Wilfred Niwagaba MP-Ndorwa East,  said BOU cannot stop such an inquiry if the Speaker rules that it does not offend the law on sub-judice.
“It is the Speaker to decide that this matter is subjudice or not, he said adding that the essence of the subjudice rule is not to prejudice a matter that is pending in court.

“Parliament is talking about an investigation to do with a forensic audit. How does a forensic audit affect the current proceedings between BoU and Crane Bank?” Niwagaba asked.

On the other hand, MP Abdu Katuntu, also has insisted that BoU,  must provide documentation relating to the closure of Crane Bank.

“Entities being audited do not have the liberty to choose what should be audited. The arguments being raised by the bank of subjudice do not apply to auditing,” Mr Katuntu wrote to the Auditor General and BoU.

Source within BoU say the main reason why Kasekende is trying to reject an investigation into the collapse of these banks especially Crane Bank is that him and Justice Bagyenda, the sacked Executive Director in charge of Supervision is because they two oversaw the collapse as Kasekende supervised Bagyenda and the two knew everything together.