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Shareholders doubt Shs1.8b construction cost for Dfcu Financial Centre in Namanve

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The Managing Director Dfcu Juma Kisaame is under pressure to explain to the banker’s shareholders how Shs1.8 billion was spent on the construction of the Dfcu Financial Centre located on the plot of 50×100 at Namanve Industrial and Business Park, an insider has told Eagle Online.

According to the source, shareholders think the project cost Shs700 million. Roko won the contract to build the building is said to have subcontracted Kisame’s construction company to do some of the work.

The shareholders are also not happy that office space remains vacant, meaning the bank is not gaining some rental fees from it. The insider says Kisaame has been tasked to identify a tenant that can occupy it or even buy the building, having spent 3-4 years without a tenant.

The insider also says that Dfcu is doing badly on forex as most of top managers who resigned went away with customers who exchange big volumes of currency. Dfcu’s competitors like KCB, NC, Tropical Bank are said to have benefited from this shift. The banks are said to have recruited former Dfcu workers based on the number clients they were personally relating with.

The insider says Dfcu’s liquidity in Bank of Uganda (BoU) has lowered, forcing it to borrow from other commercial banks.

He says Dfcu plans to close more branches it acquired from Crane Bank to cut expenditure. DFCU controversially bought Crane Bank at Shs200 billion in January 2017.

The insider continues that BoU is worried that Dfcu has only advertised not fully advertised its services to customers as awareness stands at only 65 per cent.

He says Dfcu has failed to increase all salaries of workers as promised in the recent management meeting to prevent them from going to other banks. The insider said currently some staff in Dfcu do work of three people.

The top workers who recently resigned from the bank are now hired by management as consultants in fear of seeing them join competitors. Some workers who resigned have not had their savings paid by Dfcu.

Eagle Online has already reported on mass exodus of workers from DFCU, with at least over 70 workers in the last two months leaving the bank under unclear circumstances. They further say even the human resource department that used to announce entry and exists at the bank have this time refused to announce exist because it is alarming.

This development also comes at the time when Deepak Malik who has been a director on the board of the bank resigned and left the board.

Malik’s resignation as a non-Executive Director means the Dfcu board is now left with five other non-executive directors led by All Elly Karuhanga as Chairman. Others directors are; Albert Jonkergouw, Winifred Tarinyeba- Kiryabwire, Frederick Kironde Lule and Michael Alan Turner.

Analysts say the Malik’s decision to resign confirms reports that Arise B.V. intends to leave especially that Britain’s Commonwealth Development Corporation (CDC) Group intends to exit, following Dfcu Bank’s controversial acquisition of Crane Bank Limited at only Shs200 billion yet Crane Bank had assets worth over Shs1 trillion.

Reports indicate that CDC is leaving for various reasons which include poor economy but some sources say CDC wants to dodge paying taxes on its dividends.
Financial analysts say with the revelation by Auditor General that Dfcu acquired Crane Bank Limited and yet it was the valuer and at the same time a buyer could land top Bank of Uganda executives in trouble as big shareholders of Dfcu are spending sleepless nights. The situation is made worse as the case is also in court.

DFCU Shareholding percentages
Arise BV 58.71 per cent
CDC Group of the United Kingdom 9.97 per cent
National Social Security Fund (Uganda) 7.69 per cent
Kimberlite Frontier Africa Naster Fund 6.15 per cent
2 undisclosed Institutional Investors 3.22 per cent
SSB-Conrad N. Hilton Foundation 0.98 per cent
Vanderbilt University 0.87 per cent
Blakeney Management 0.63 per cent
Retail investors 11.19 per cent
BoU staff retirement benefit scheme is 0.59 per cent

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