Thursday and Friday were really the first two days that parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) faced off with the Bank of Uganda (BoU) Board of Directors as the legislators launched the actual enquiry into seven defunct banks, starting yesterday with Teefe Trust Bank whose date of closure seemed unclear as two dates were presented.
But first, not all members of the BoU board appeared and the Governor Prof. Emmanuel Tumusiime-Mutebile (Chairman of the board) had to apologise. “I bring apologies from the Board Members, who have not been able to join us today due to other engagements,” he said. One of the key who missed is Dr Louis Kasekende, the deputy governor and Vice Chairman of the board who was questioned by the Auditor General as he investigated BoU.
The team of BoU board members also showed signs of unpreparedness. Some members present yesterday had a conflict of interest and therefore Committee Chairman Abdu Katuntu had to politely ask them to leave. These were Dr. William Samson Kalema and former Auditor General (AG) James Kahooza who have served on its board. Kalema served on the boards of The Cooperative Bank and Dfcu Bank yet at the same time served on BoU board. One wonders why Tumusiime-Mutebile’s team undercooked this scenario. Kahooza surprised MPs when he said his role was to audit BoU of which he was once a board member.
The exit of Dr Kalema and Kahooza who were expected to answer some tricky questions was a big blow to the BoU team. That meant that the Governor Tumusiime-Mutebile and the Executive Director, Supervision, Dr.Tumubweine Twinemanzi were almost the only one left to respond to the issues raised by the Auditor General’s report.
Matters were made worse when directors of the BoU’s legal department failed to ascertain the date on which Teefe Trust Bank was closed. One of the officers would push the question to Mutebile and Dr Twinemanzi when as asked to give her legal opinion on the exact date was the bank closed. In fact the BoU legal team seems to be aloof BoU closure of banks. This was reflected as one of the legal officers, a lady said she had been ambushed with the question on the legal status of the 23 land titles of Teefe Trust Bank clients. Yesterday MP Odonga Otto called for her arrest, only that Katuntu, being the Chairperson of the committee, is holding BoU guys with a soft hand.
Mutebile insists that the resolution of banks is a complex exercise and that each bank being resolved has its own unique circumstances. “There are a number of challenges encountered during resolution. One of the main challenges is litigations by the different stakeholders. There have been several court cases against banks under resolution spanning many years,” he said Friday morning. In their submissions, the BoU staff seem to suggest there were no cases of corruption or unfairness in the closure of the banks yet the Auditor General John Muwanga says certain guidelines were not followed which caused the intervention of parliament through Cosase.
The governor appreciates the MP’s interest in resolution of defunct banks but then said: “Our hands are tied and Bank of Uganda has to operate within the law.” Yet Kasekende at first thought the bank was above the law that it could not be investigated by any other government agency. Now his boss concedes the institution is a law-abiding entity.
Like his deputy Kasekende, Tumusiime-Mutebile, if fearful of the subjudice rule, which the Mps said the investigation won’t conflict with. “Our appeal to the Committee is that as you engage us, be mindful of the ongoing court cases, which have implications on how much information we can divulge on the affected banks.” From the governors’ plea, it appears BoU will continue to hide the information that Cosase needs especially that his deputy Kasekende was against the inquiry. That means the MPs will keep on sending back BoU staff to bring more documents.