It was too early for DFCU bank and its shareholders to dance on the grave of the formerly glorious crane bank limited (CBL).
Crane bank Limited which was Uganda’s only indigenous commercial bank was fraudulently and hurriedly taken over by Bank of Uganda on Thursday, October 20, 2016 on claims that the bank was undercapitalized and thus posed systemic risks to the banking sector.
The elites in Bank of Uganda thus suspended management and board of Cbl until 2017 when it was donated to the now crisis hit dfcu at a meager credit of only Uganda shillings 200 billion which was only the value of liabilities.
The upshot of this fraudulent transaction was that dfcu and its management would later find themselves being an integral part of this ‘broad day robbery’ that seized a bank with assets worth Uganda shillings 1.3 trillion at a giveaway price.
As it would later emerge, the sales agreement that the 2 parties entered into was a seal to the word that had been on the grapevine that surely, crane bank was acquired at zero price.
Forinstace, it didn’t state the net purchase price, didn’t value the assets outside branches, fraudulently transferred assets of Meera Investments to dfcu and not limited to ignoring the interests of shareholders.
Shareholders including Dr Sudhir Ruparelia had paid over Uganda shillings 300 billion to clear nonperforming loans.
All this and more couldn’t have happened without the knowledge of management led by dfcu bank’s embattled Managing Director, Juma Kisaame.
Dfcu’s current adversities
Dfcu bank is under misery, and is dogged by shareholder unrest, and plummeting confidence with its second majority shareholder, the Common Wealth Development Corporation (9.97%) cutting ties with the struggling foreign commercial bank.
As if this isn’t sufficient, Mr. Maalik Deepak, the executive director of Arise Bv, the bank’s majority shareholder left the bank amid the crane bank controversy.
The resignation of Deepak had been dishonestly dismissed as fake news by dfcu’s communication ‘expert’ Rukh Shana Namuyimba.
These two intermittent events were a sign of a deep crisis as I explained in my previous article.
The group’s chairman Elly Karuhanga came out boldly to state that the bank was facing liquidity challenges.
In a hastily called presser on 6th July, 2018, Elly Karuhanga confirmed that there was shareholder revolt stating that the exit of CDC will affect the bank’s operations.
Together with Edward Ochom, the two revealed that the bank has no enough cash to lend and pay its customers adding that, customers were getting less amounts of loans than applied for.
By making this revelation, it was an indictment on the MD Juma Kisaame who was absent from the presser to answer critical questions that would arise.
The MD is responsible for the daily running of the bank and reports to the board.
The same Kisaame and team reported to the board and shareholders that the bank had made a whooping net profit of Shs 127 billion in 2017 up from shs 46 billion in 2016.
So what explains the exit by CDC when dfcu is performing well? What more can Juma Kisaame offer to curtail the current liquidity crisis at the bank? Resigning would save the image of the bank, bring bank customer and shareholder holder confidence.
Kagenyi Lukka is a current affairs analyst and the next MP,Ikiiki constituency in Budaka.