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Lack of minutes of Crane Bank sale complicates transfer of CDC Group shares

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Britain’s Commonwealth Development Corporation (CDC) Group is still stuck with its 9.97 shares in Dfcu bank following the insistence by the potential buyer, Investment Fund for Development Countries that Dfcu bank avails minutes regarding the purchase of Crane Bank Limited on January 25, 2017.

Dfcu Limited on December 19, 2019 announced that CDC Group was to sell 74,580,276 shares which make up 9.97 per cent of the total 748, 144,033 ordinary shares in the company troubled by the controversial acquisition of CBL at Shs200 billion, paid in installments.

The demand by the Danish Company to look at the minutes, according to sources, has forced Dfcu management 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.

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.

According to sources within the Dfcu group, a rift has cracked among the top executives as they blame each other for mess the bank is facing over lack of minutes. It is understood, the Managing Director, Mathias Katamba, board chairman, Jimmy Mugerwa are reportedly accusing Mr. Kisaame, former Deputy Governor, Dr.Louis Kasekende, William Ssekabembe and former Executive Director in charge of Supervision, Justine Bagyenda for having fast tracking the deal without minutes.

Eagle Online has also learnt that matters have been made worse by parliament rejecting a secret move by the bank to have a parliamentary hansard doctored so as to have sections implicating them of having bought Crane bank without any minutes removed so as they can be able to generate minutes to enable them sell CDC shares.

Sources also reveal that an attempt by Kasekende and top managers of Dfcu to meet the Speaker, Rebecca Kagada have been rejected leaving them without any solution CDC shares.

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