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DFCU Bank disputes media reports on controversial transactions

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Following media reports that DFCU Bank was involved in controversial transactions as it bought off Global Trust Bank Uganda (GTBU) and Crane Bank Limited (CBL), its company Secretary Agnes Tibayeita Isharaza, has issued a media statement, saying the reports have no any truth pinning the Chief Executive Officer Juma Kisaame and Bank Chairman Jimmy D. Mugerwa.

The two officials are among those in the bank that held discussions with the Bank of Uganda (BoU) top officials as their bank bought especially Crane Bank Limited in January 2017. BoU top officials are currently being probed by Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) over the liquidation and sale of seven commercial banks.

Sources say Mr. Kisaame and Mr. Mugerwa are lined up to appear before Cosase in regard to Global Trust Bank and CBL transactions.

The Auditor General John Muwanga’s special audit report of BoU on defunct banks, questions why BoU had to spend over Shs400 billion of taxpayers’ money on CBL during the takeover and yet sold the assets and liabilities of the bank at a paltry Shs200 billion, moreover paid in installments.

On DFCU Bank’s purchase of GTBU, the Auditor General says: “I observed that there were no guidelines /regulations or policies in place to guide the identification of the purchasers of GTBU. There were also no guidelines to determine the procedures to be adopted by the Central Bank in the sale of assets and transfer of assets or liabilities of the defunct banks to DFCU.”

He continues: “I was not provided with records of the procurement process to ascertain the bid requirements, offers made, list of bidders, evaluation criteria, evaluation report and negotiation minutes leading to the P& A agreement. In the absence of guidelines and procurement records, I could not ascertain whether BOU selected and evaluated the bids in line with the evaluation criteria.”

On CBL: However I was not provided with the negotiation minutes leading to the P&A agreement, In the absence of guidelines and negotiation minutes, I could not determine how BOU selected the best evaluated bidder and how the terms in the P&A were determined.

Despite such concerns from the Auditor General, DFCU Bank’s Company Secretary, Ms Isharaza thinks otherwise, saying the media has been reporting falsehoods.

“Over the past several weeks there has been false, misleading or fictitious information on social media and in articles disseminated on some online publications about the Bank, its Chairman Mr. Jimmy D. Mugerwa and the Chief Executive Officer Mr. Juma Kisaame,” she says.

Relatedly the news outlets months ago reported that there would be changes in the management team of DFCU Bank it this has happened with the appointment of William SSekabemba as Managing Director and Mathias Katamba as the In-coming new CEO. The changes were announced in the local media. But the changes came as a result of Kisaame seeking resignation due to the poor handling of DCFU Business in relation to CBL purchase.

In what looked like loss of confidence and interest, CDC Group, expressed interest to sell their commercial interests in DFCU Bank, information which the media published yet DFCU officials in Kampala would come up later to say it was not true.

The letter from Irina Grigorenko, CDC’s Investment Director in charge of Financial Institutions, would later silence the DFCU officials in Kampala when it indicated that indeed the Group was looking for buyers of its shares in DFCU Bank.

“It is our aspiration to exit in a manner that causes minimum disruption to the business and ensures the orderly trading of DFCU’s shares.” Grigorenko said.

The “false information” which DFCU Bank says it has been used to tarnish its name has actually come out to be true. And with then ongoing Cosase probe, more will come out to show that the deals DFCU Bank got involved in were not all clean.

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