Former COSASE chairman, Abdu Katuntu.

The legislators on Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) are expected to begin probing the Bank of Uganda (BoU) top managers over the controversial closure and sale of seven commercial banks, key among them Crane Bank Limited (CBL).

The Committee will quiz the BoU officials using the forensic report by the Auditor General John Muwanga which revealed the rot ranging from unaccounted for money, missing land titles, disputed payments to external lawyers and customer loans that were inherited from closed banks and sold at an undervalued rate without justification.

The report now in parliament raises key issues regarding the closure of Teefe Bank (1993), International Credit Bank Ltd (1998), Greenland Bank (1999), The Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and the sale of Crane Bank Limited (CBL).

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The report says assets worth Shs23 billion formerly owned by Global Trust Bank (GTB) Uganda were not transferred to Dfcu in the purchase and assumption agreements when the bank was closed in July 2014. Some of the assets were: cash balances (Shs6.6 billion), amounts due from other banking institutions(Shs2.3 billion), other assets (Shs5.1 billion),amounts due from group companies (Shs9 million), property and equipment (Shs5.6 billion),intangible assets(Shs758 million) and deferred tax (Shs2.4 billion).

Auditors in the report say they could not trace Shs9 billion which was taken from other banks as the inventory report highlighted then. The money was not reflected on the recovery account. The Committee chairperson, Abdu Katuntu yesterday said that Cosase would a preparatory meeting today.

The committee is expected to summon a number of individuals such as; BoU Governor Prof. Emmanuel Tumusiime-Mutebile and his deputy Louis Kasekende; former BoU director in-charge of banks supervision, Justine Bagyenda; the Dfcu managing director, Mr. Juma Kisaame, as well as the former owners of the seven defunct banks.

Finance minister Matia Kasaija could be summoned over the sale of closed banks.
Mr. Muwanga has also faulted BoU officials for selling CBL assets and some liabilities to Dfcu bank without valuation as they depended on Dfcu’s inventory report to sale CBL at only Shs200 billion paid in installments.

The auditors wonder why BoU sold 79 per cent of the loans it inherited from International Credit Bank, Cooperative Bank and Greenland Bank in 2007 despite having closed the banks in 1998 and 1999.