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COSASE should not be hoodwinked to allow BoU account for Shs478b misused in Crane Bank takeover

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Yesterday parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) sent away top Bank of Uganda (BoU) officials from parliament for not coming with required documents to support the use of Shs478 billion the central bank says it injected into defunct Crane Bank Limited (CBL) as liquidity support while under receivership.

The officials who included Deputy Governor DR Louis Kasekende had gone to parliament unprepared to the extent that no BoU accountant was on their team, something that angered MPs.

BoU officials say they injected that money in CBL during the receivership period that spanned from October 20, 2016 to January 25, 2017 when BoU sold some of the assets and liabilities of CBL to Dfcu Bank at only Shs200 billion, moreover paid in installments. BoU had closed CBL due to undercapitalisation.

During the first COSASE probe on BoU, MPs failed to get all documents related to how the money was used, something that had been highlighted in Auditor General John Muwanga’s special audit report of BoU on defunct banks. There is no clear information on who auhtorised and received the money.

That forced MPs to order for a special audit probe on Shs478b. The Auditor General who did the audit established that about Shs320 billion was unaccounted for by BoU officials. It is now surprising that the new COSASE still wants BoU to account for the money which the Auditor General a professional in auditing and accounting said was missing.

Of importance also is that the Auditor General declined to redo the audit of the Shs478 billion after BoU Deputy Governor requested that he does so. The Auditor General said then that only parliament could order him to do that task especially that in the first audit BoU officials failed to present all the related documents.

The current COSASE under MP Mubarak Munyagwa should instead go by what the report by their predecessors said on that money that BoU loaned itself as the receiver of CBL. It appears BoU officials missed that money anticipating that CBL shareholders would pay it as a penalty but MPs at the time of the first probe argued that BoU which acted as lender and borrower could not transfer that responsibility to parties that were not involved in the transaction.

During the first probe of BoU a senior BoU official Benedict Sekabira said that even though the bank had claimed it used Shs478 billion as liquidity support to CBL in receivership, only Shs150 billion was required to keep the former lender operating.

CBL shareholders led by Sudhir Ruparelia say they cannot pay the money that it is not reflected anywhere on CBL accounts and in any case, the said money was reportedly injected into Crane Bank after takeover and therefore, BoU should explain who exactly received the money. That has made BoU look for all possible ways of accounting for the money even though they failed to do that earlier. That means the information they want to present could have been “doctored” to suit their interests, especially that there is a related case in court.

The new COSASE should therefore not hoodwinked into accepting the new accountability of Shs478 billion. Instead the MPs should question BoU officials as to why they failed to account for the money during the first probe where it was believed certain documents related to the use of the money were intentionally hidden.

MP Munyagwa’s committee should still question BoU as to why they hid some documents related to the use of the money. It should not allow that BoU accounts for that money afresh. It would be foolery.

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