Auditors close in on Bank of Uganda’s Bagyenda

Kampala: Investigators from Auditor General’s office have zeroed on key individuals and key departments at central bank as seek answers for the collapse of commercial banks in the country.

According to sources, the auditors want to establish whether the closed banks where inefficient in their operations or it was a deliberate syndicate by officials at Bank of Uganda.

Some of the banks include Global Trust Bank, Crane Bank among others.

Among those the investigators are keenly interested in interrogating and obtaining files and statement from is the sacked former Executive Director in charge of supervision, Justine Bagyenda.

Bagyenda held the supervision docket for close to 20 years and it is during her tenure that most of these banks closed.

According to sources within BoU, it is reported that the governor, Emmanuel Tumusiime Mutebile ceded powers of supervision of commercial banks to Deputy Governor Louis Kasekende as the overall supervisor and this made his the overseer of Bagyenda as an ED-Supervision and therefore, the two are quite knowledgeable on how operation and collapse of the banks.

Already  forensic audit report by the AG has named irregularities in the insolvency and selling off of five commercial banks by (BoU) dating back to 1993.

The draft report, shows that at least Shs23 billion from the sale of only Global Trust Bank (GTB) is unaccounted for, 25 land titles are missing, and customer loans inherited from closed banks were sold at an undervalued rate. GTB was closed in July 2014.

The other defunct banks whose closures were audited are International Credit Bank Ltd (closed September 1998), Greenland Bank (closed April 1999) and The Cooperative Bank, closed in May 1999.
The draft audit report indicates that BoU refused to cooperate with the Auditor General regarding the sale of Crane Bank, National Bank of Commerce (NBC) and Teefe Bank on grounds that there are cases in court regarding the closure of the three banks and any inquiry would offend the law on sub-judice.

Eagle Online has established that close to US $3 million from the US $8 million submitted by Crane Bank Limited to BoU on behalf of its shareholders was not declared to BoU by lawyers that were handling the case and instead US $5 million declared to BoU. The US $3 million is reported to have been shared as legal fees by the lawyers and two top officials at Bank of Uganda.

The Speaker of Parliament Rebecca Kadaga wrote to AG insisting that he 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 th 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 of sale of the banks.