The Bank of Uganda (BoU) Governor, Emmanuel Tumusiime-Mutebile caused shock among MPs when he said Friday morning that he never knew about the central bank holding 23 land titles of customers of the defunct Teefe Trust Bank, 25 years after its closure.
Tumusiime-Mutebile made the revelation as he appeared alongside other BoU senior staff before parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) during its second day of inquiry into the closure of Teefe Trust Bank, which is among the seven commercial banks that were closed by BoU over the years.
The investigation of BoU staff is based on the Auditor General John Muwanga’s special auditor report which identified illegalities in the sale of seven commercial banks, Teefe Trust Bank inclusive.
Yesterday Cosase established that Teefe Trust Bank was closed illegally by the former minister of Finance, the late Mayanja Nkangi who closed the bank on November 4, 1993, thinking that he had powers to close it under the Banking Act, 1969. Interestingly BoU staff seem not know under which legal regime the bank was closed given also the existence of The Financial Institutions Statute, 1993 when the bank was closed.
When committee Chairperson Abdu Katuntu asked BoU staff about the current legal status of the 23 land titles, the Bank’s legal department could not give a clear answer, saying that they needed more time to establish the facts. Katuntu granted them the request and the officials are expected to give a definite answer on Monday when they appear again before the committee.
The Committee has however given the Auditor General the documents concerning the land titles for verification from the Ministry of Lands.
Meanwhile, some documents presented showed a discrepancy on the inventory of assets and liabilities of Teefe Trust Bank. On November 2, 1993, Tumusiime-Mutebile wrote a letter to the late minister Jehoash Mayanja attached with the ‘inventory’ of Teefe bank’s assets and liabilities But the Auditor General Muwanga says it was just an examination report of the assets as the ‘inventory didn’t meet the criteria.
The BoU team would amaze the legislators when they said evaluation Teefe bank’s assets and liabilities was done by a private liquidator. Mr. Ben Sekabira Director, Financial Markets Development Coordination, who participated in the closure Teefe Bank as a junior officer, said they needed time to check for the evaluation report of the auctioneers.
The Committee has asked the BoU team to come back with individuals that were involved in the transaction of Teefe Trust Bank. “Any public officer even after leaving office, must account,” Katuntu said.
The legislators also want BoU to furnish them with the terms of engagement as they hired the external liquidator, who Executive Director, Supervision, Dr.Tumubweine Twinemanzi, who later say died years ago, leading to a question whether he was running the company under sole proprietorship.
The Mps also want the list of properties BoU handed over to the private liquidator, saying only a list of properties returned by the auctioneer is availed. They also want to know how BoU arrived at 3 percent reward to the private liquidator as cost the properties sold off.
Sekabira also revealed that a case in Court of Appeal has delayed the winding up process of Teefe Trust Bank. The case, he said, has stayed in court for 15 years. Balintuma Bus Company, he said sued both Teefe Trust Bank and BoU.
Sekabira said they called depositors of Teefe Trust Bank two times to be paid their balances but that they received few responses. The money he said was being paid in cash and cheques, depending on the amount of money depositors had on their accounts. Mps still wanted to know whether BoU made some media announcement related to the same.
On Monday next week the Committee will quiz the BoU team on sale International Credit Bank, Greenland Bank and Cooperative Bank. The legislators have also asked BoU staff to come with any document related to Nile River Acquisition Company that acquired loans of three banks at 93 per cent, despite the banks having a book value of about Shs135 billion but with secured loans of Shs34.5 billion which had valid, legal or equitable mortgage on the real property and were supported with legal documentation.