COSASE chairperson, Mubaraka Munyagwa.
EC Village Verification


By Our Reporter

Dfcu is facing challenges as UK’s Commonwealth Development Corporation (CDC) Group is stuck with shares, the bank last year having announced that the British company had identified the buyer of its shares.

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Indeed CDC Group identified the Danish Investment Fund for Development Countries to buy its 9.97 percent share in Dfcu but the challenge is that the Danish company wants minutes to look at minutes that okayed the transfer of Crane Bank Limited (CBL) to Dfcu by the Bank of Uganda.

The demand by the Danish Company to look at the minutes, according to sources, has forced Dfcu top gurus to look at the possibility of approaching parliament and see if they can delete one of the findings of parliament’s Committee on Commissions, State Authorities and State Enterprises (COSASE) that investigated BoU over the controversial sale of seven commercial banks between 1993 and October 20, 2016. That finding is that BoU transferred CBL assets without any minutes written, something that COSASE found unusual in the transaction of such a magnitude.

During the probe of BoU, the then Executive Director of Supervision, Ms Justine Bagyenda confirmed to COSASE that the sale of CBL to Dfcu was done over telephone and that there was no any minutes written to effect the sale. The same was confirmed by MMKAS Advocates who were the transactional advisors acting on behalf of BoU.

Sources say top managers from Dfcu want to sort of forge minutes for the sale of CBL so as to enable CDC Group transfer its share to the Danish company owned by the Danish government. It is alleged that the bank allegedly approached COSASE chairman Mubarak Munyagwa with a view of deleting the clause in the report implicating them admitting that they had no minutes. Eagle Online failed to obtained a comment from Clerk to Parliament, Jane Kibirige as she was reportedly out of the country.  Kibirige’s name has also come up in the allegations.

Another area of interest to the Dfcu group is have minutes forged at BoU so as they are exonerated from any bad undertaking and have minutes to clear the Dfcu-Crane bank transaction.

However, sources in parliament that this website talked to said DFCU’s alleged move to have the finding of lack of minutes in the sale of CBL in January 2017 will not be achieved as it is already recorded in the Hansard. “It will be hard to retract that from the Hansard,” an MP who participated in COSASE inquiry said, when asked about the possibility of removing the shocking finding.

Unlike CDC which participated in the acquisition CBL without documents, Danish Investment Fund for Development Countries is reportedly insisting on all documents surrounding the acquisition of CBL to be availed so that in future, there shouldn’t be any litigation involving the new buyer.

CDC Group didn’t want to their reputation to be associated with the scandal in which Dfcu acquired CBL as it would damage tis standing in the banking industry.

During the parliamentary probe into the closure of commercial banks by BoU, it was revealed that most banks were sold with no supporting documents.

The issue of minutes is reported to have halted the smooth transfer of the shareholding until it is resolved. Eagle Online has learnt that faced with this challenge, the board and top managers decided to call Mr. Kisaame back to handle the matter since he was the one in charge of the transaction.

The Danish fund are said to be straight that nobody at the body can convince them accept concluding the transfer.

Last year in February COSASE chased away Dfcu Bank officials from parliament for presenting documents which were unconvincing as they were not signed.

During COSASE probe, Dfcu officials led by chairman board of directors Jimmy Mugerwa who appeared before COSASE as witnesses in the closure and purchase of Crane bank, made a defense presentation in regards to the terms of purchase of Crane bank agreement, however, the presentation was backed by fake documents which were neither dated nor signed by the bank authority. However, this prompted MPs of the committee to kick them out and allow them reorganize themselves.

“It’s prudent for this committee to throw out Dfcu team because they are so confused and disorganised; they are fidgeting with their own documents. It is in the best interest that Dfcu withdraws and reorganizes themselves,” the then COSASE chairman, Abdu Katuntu said.

Some of the documents that caused the MPs to chase away Dfcu bank officials led by Chairman Juma Mugerwa and new MD Mathias Katamba included one on “Fair valued loans and advances of customers of Crane Bank Limited (CBL). The other included schedules of CBL loans and advances.

The Auditor General John Muwanga in his report on defunct banks faulted Dfcu bank for engaging in transactions that did not follow proper guidelines as it bought of CBL assets at Shs200 billion, paid in installments. Dfcu Bank also bought the assets of Global Trust Bank without following guidelines as laid in the Financial Institutions Act, 2004.

However, matters were made worse when former Chief Executive Officer of Dfcu, Juma Kisaame confirmed to MPs on the Committee on Commissions, Statutory Authorities and State Enterprises that the invite for Dfcu to come and buy Crane bank was done on phone.

Kisaame who was appearing before the committee then confirmed earlier remarks by Ms Bagyenda that she simply picked up her phone, called Kisaame to discuss matters of the liquidation of Crane Bank Limited.

Kisami informed the committee that Bagyenda contacted him on phone to come to her office where he was informed of a potential bank that they would acquire.