Bank of Uganda

The Central Bank –Bank of Uganda currently under probe by the Auditor General (AG) over the mismanagement of properties of closed banks is under a financial crisis after making a loss of Shs494 billion now is seeking capitalization from central government, sources say.

Following instructions from Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase), the office of the Auditor General is carrying out a broad forensic audit into the operations of Bank of Uganda and is demanding accountability for Shs200 billion taxpayers’ money that was injected into Crane Bank before it was sold to Dfcu Bank.

Interestingly, despite injecting Shs200 billion of the taxpayers’ money into Crane Bank capitalisaiton, BOU sold the bank to its competitor- dfcu at the same amount. Leaked documents show that dfcu will pay the money in installments.

However, Jinja Municipality East MP Paul Mwiru who was the Vice Chairman of the Public Accounts Committee in the last Parliament, earlier said that BOU top managers must account for Shs600 billion not Shs200 billion, claiming that before the release of Shs200 billion to Crane Bank under the guise of capitalization, Parliament had already capitalized BoU with Shs400 billion.

Having acquired Crane Bank in January 2017, Dfcu reported Shs127 billion net profit as of December 2017, up from just Shs46 billion in 2016.

The Auditor General John Muwanga was also instructed by Cosase to look into Crane Bank sales agreement that was signed in January 2017 between BoU and Dfcu Bank. Former Crane Bank shareholders are seeking legal redress because of the way the bank was sold, without putting their interests into consideration.

Cosase is in possession of a Crane Bank shareholders’ document disputing the sale and summing up the sales agreement as fraudulent and it has also been passed to the Auditor General’s office, which will carry out the forensic audit.

Some of the issues Cosase wants the auditor general to look into are; the cost of Crane Bank liquidation, assets management, hiring of external lawyers, liabilities and also the status of all the banks closed by the central bank.

The Auditor General’s office has confirmed that the forensic audit into BoU is ongoing and that they will leave no stone unturned.