While appearing on Saturday’s political talk show on Capital FM radio, The Capital Gang, Bugweri county MP Abdu Katuntu who is also the Chairperson of Parliament’s accountability Committee, COSASE revealed that the audit report on the collapse of banks including CBL was ready.
Katuntu and his committee ordered the auditor general to carry out an audit about the same towards the end of 2017.COSASE’s directive followed unconvincing accounts by BOU on the donation of crane bank Limited to DFCU at a disguised paltry credit of 200 billion Ugandan Shillings.
Hardly had Katuntu finished making the revelation about the audit report than news of how the formerly glorious bank was actually given to DFCU at zero shillings broke through with a bang.
Crane bank may not have been performing poorly as purported by ‘experts’ in BOU. This is because DFCU bank would hardly after a year, pride itself in having its net profits skyrocket from a niggardly 23 billion shillings in 2016 to a whopping 114 billion shillings in 2017 while its balance sheet jumped to 3.05 trillion shillings in June 2017 up from 1.8 trillion. Shillings as at December 2016.How could a struggling bank boost DFCU to this extent?
This belaboured, the BOU-Dfcu agreement that sealed the donation of crane bank to DFCU on 25 Jan 2017 was another dark spot.
In order to defraud shareholders of CBL who included Dr Sudhir Ruparelia, this agreement doesn’t anywhere make reference to them yet they had been made by BOU to clear a sizable amount of loans in the defunct crane bank.
In addition, the failure by this agreement to state the value of liabilities assumed by DFCU and the value of assets left a lot to be desired. This implies that there was gross undervaluation yet CBL’s assets were valued at 1.3 trillion shillings at the time of BOU’s takeover?
How could a bank with such assets be sold for a song ?
What was the motive behind this?
Who were the architects and beneficiaries of this fraud?
BOU and its conflict of interest in the purported sale of CBL.
BOU as an industry regulator was duty obliged, after takeover, to ensure that CBL is saved from the alleged undercapitalization. And in the event of selling, sale it to best and deserving commercial bank.
However as it has emerged, BOU had an interest in donating CBL to DFCU because BOU is one of the shareholders.
A look at the list of shareholders of DFCU indicates that BOU under the guise of Bank of Uganda Staff Retirements Benefits Scheme owns 0.59% of the buyer (DFCU).
Other shareholders are; Arise BV (58.71%), CDC Group of the United Kingdom (9.97%), National Social Security Fund (Uganda) 7.69%, Kimberlite Frontier Africa Naster Fund (6.15%), SSB-Conrad N. Hilton Foundation (0.98%), Vanderbilt University (0.87%), Blakeney Management (0.63%) and Retail investors (11.19%).
Being an interested party in both selling and buying, BOU finds itself in the storm to account for how fair it acted. But even a layman can read attributes of possible connivance to have a fair deal.
Finally, the golden question remains, in the priceless give away of CBL, can BOU give a convincing account from how CBL went to undercapitalization despite the five star performance it had recorded, the process of take over and its purported sale?.
Whereas commissions of inquiry have been previously bashed as being charades, I believe we need one in this fiasco. This is when the truth will come out, and if possible, heads should roll.
Kagenyi Lukka is a current affairs analyst and an aspiring MP,Ikiiki constituency.