Representatives of the Uganda Registration Services Bureau (URSB) led by the Manager Business Registration, Robert Mugabe, on Tuesday could not explain to MPs on parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) why the second registration of the Cooperative Bank in 1997 took place even as the first one bank exited since 1964.
The Cooperative Bank was closed on May 19, 1999 by the Bank of Uganda (BoU) due to continued poor performance and non-compliance with regulatory capital adequacy requirements. It was one the six others closed between 1993 and 2016 by BoU majorly for being undercapitalised. The others included Teefe Trust Bank, Greenland Bank, International Credit Bank, National Bank of Commerce, Global Trust Bank and Crane Bank Limited.
COSASE Chairman Abdu Katuntu faulted URSB for registering the second Cooperative Bank in 1997 without finding out whether the first still existed or not. Apparently there is no resolution by shareholders indicating that the first Cooperative Bank closed. Some of the former owners last week told MPs they have never discussed the resolution of the bank. They wondered how some individuals led by businessman Dr William Kalema, a former board member registered the second bank in the exact names.
Last week BoU top officials when asked by the MPs said they closed The Cooperative Bank that was registered in 1997, yet the same was using the assets of the bank that was registered in 1964.
MP Abdu Katuntu said there could foul play somewhere with some individuals wanting to take over the assets of the former bank.
According to BoU officials, the process of winding up the Cooperative Bank is ongoing .However, shareholders of the former bank while appearing before the MPs said they would want their bank re-opened for business much as months ago, BoU Governor Prof. Emmanuel Mutebile said the closed banks can never be re-opened for business.
According to the Auditor General John Muwanga who investigate BoU over the sale of the seven banks, the loans assets of Cooperative Bank were amalgamated with those International Credit Bank and Green Bank before they were sold to Nile River Acquisition Company (NRAC) at 93 percent discount. That mean that the total loans book value of the three banks worth Shs135 billion were sold at only Shs8.8 billion by BoU. The MPs are still investigating this matter.