Bank of Uganda has failed to provide the Auditor General (AG) details of the liquidation of Teefe Trust Bank in 1993 as it deemed the commercial bank insolvent at the time.
“I was not availed with the Inventory report, loan schedules, customer deposit schedules and Statements of affairs of Teefe Trust Bank to enable me to fulfill the specific audit objectives. Due to this limitation, I could not assess the status of the assets and liabilities of Teefe Trust Bank from closure to date,” the AG John Muwanga says in his report he signed on August 27, 2018 and now lies before parliament for debate.
It should be remembered that in a letter ref A8:70/288101 dated November 28, 2017 the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE); requested the AG to undertake a special audit on the closure of Teefe Trust Bank and six others commercial banks by BoU.
The committee specifically requested the Mr. Muwanga to provide assurance on; the status of the banks at closure, cost of liquidation, status of assets and liabilities of the aforementioned banks from closure to date, non-performing assets, non-recoverable assets and liquidators.
The confidential report titled Special Audit Report of Bank of Uganda on Defunct Banks shows that BoU has not provided the liquidation agent and period for Teefe Trust Bank since it was closed 25 years ago, which raises some questions. Despite that, BoU has liquidated the assets of the bank.
Section 11 and 17 of the Financial Institutions Statute (FIS) 1993 and Financial Institutions Act (FIA) 2004 respectively mandate the Central Bank to revoke a licence of a financial Institution if it is satisfied that the financial institution has ceased to carry on business, declared insolvent, gone into liquidation, wound up, undercapitalization and dissolved.
In the report, the AG cries that BoU management did not give him documents related to the closure of Teefe Bank. “BoU management explained that it will continue to search in the archives to get all the information,” he says.
Mr. Muwanga’s revelation that he was denied some information is not a surprise because the Deputy Governor BoU, Dr. Louise Kasekende, tried so much to frustrate the AG’s work and sought the opinion of the Solicitor General who advised that BoU officials should not give information to the AG as there was a related case in court.
The Speaker of Parliament Rebecca Kadaga would come in to ensure the AG did investigate BoU senior staff including Kasekende and former director of supervision Justine Bagyenda who currently is under investigation by the office of the Inspector General of government and the Financial Intelligence Authority for alleged illicit accumulation of wealth.