Members of Parliament on the outgoing Committee on Commissions, State Authorities and State Enterprises (COSASE) have finalised and appended their signatures on the report of the probe of Bank of Uganda (BoU) on the closure of seven commercial banks which are now defunct.
Eagle Online has reliably learnt that not like it has been in most cases were there is a minority report that differs from the major report when MPs do such probes but for BoU saga, no MP or MPs came up with a minority report, meaning they have all agreed to the recommendations.
The MPs started probing BoU on October 2018 basing on the Auditor General John Muwanga’s report on seven defunct banks which he said were closed in disregard of laid-down guidelines as stipulated in the Financial Institutions’ Statute and Bank of Uganda Act.
A source has told Eagle Online that MPs who spent days in Jinja drafting the report have outlined harsh recommendations against BoU officials such as its Governor Emmanuel Tumusiime-Mutebile, his deputy Dr. Louis Kasekende and Ben Sekabira, Director Financial Markets Development Coordination and Margaret Kasule, the legal counsel.
The committee, according to the source, has recommended the officers mentioned cease to be employees of BoU after end of their contracts, particularly Kasekende and Mutebile who are due for retirement. The source further said the committee has recommended for contracts for the senior positions at BoU. That is supposed to make officials work as expected.
Further the source who talked to Eagle Online said MPs want the Ministry of Finance to have a strong supervisory role at BoU. The Mps during interface with the Finance minister Matia Kasaija were shocked when he told them he has never received any report on the closure of banks by BoU. The source said the MPs argued that the Finance Ministry is the mother of the economy and as such cannot leave BoU officials to take critical decisions as they wish like it happened with the closure of banks, some of which would be sold in hours such as Global Trust Bank and Greenland Bank.
In the report to be presented to parliament, the MPs also want MMKAS Advocates to be delisted as one of the service providers of BoU following the firm’s controversial payments of Shs4.2 billion even as its officials also serve as directors of some commercial banks which are regulated by BoU. The MPs took that as conflict of interest, saying with such BoU cannot act decisively on such banks in case of a problem.
Relatedly, the MPs have also recommended that BoU workers should not buy any shares in banks through the Staff Retirement Benefits Scheme. They say this also creates conflict of interest like it happened when BoU transferred assets of Crane Bank Limited and Global Trust Bank Uganda to Dfcu Bank where the central bank’s staff have 0.59 per cent of the shares in Dfcu Bank.
In the report, MPs also want BoU to compensate former shareholders of the banks that the were closed. The Shareholders who appeared before the MPs during the inquiry asked for compensations that will see BoU pay in trillions of shillings. The MPs also want BoU officials to cough about Shs270 billion injected in Crane Bank Limited (CBL but cannot not be traced as BoU officials failed to account for the money that was part of Shs478 billion said to have been put in CBL as liquidity support and other costs during the receivership between October 20, 2016 and January 25, 2017.
The recommendations are also likely to see some of the banks reopened much as some time back Tumusiime-Mutebile said it would be hard for closed banks to reopen to the public.