Bank of Uganda is on the spotlight after it emerged that documents making up the confidential special audit report into closed banks disappeared without a trace.
In his August report to Parliament, Auditor General John Muwanga said key information/ documents relevant to closure of the defunct banks were not availed, constraining the specific objectives of the special audit into BoU dealings.
There is nothing hidden that will never be unearthed. The special audit report on the defunct banks dated 27/8/2018 couldn’t have been completed without paying attention to Dr Sudhir Ruparelia’s crane bank.
While bank of Uganda was expected to cooperate with the auditor general by providing information and other documents about the sale of CBL,the auditor general’s report details how key information documents relating to the much contested sale of crane bank couldn’t be availed/found.
As to why the Management at Bank of Uganda tightly kept such documents to their chests,can be answered by questioning what gain they would make out such unprofessional conduct.
No detailed documentation on values of Assets and liabilities transferred to DFCU
This has been a baffling question especially on the side of shareholders of CBL.
Section 90(4)(f) of the Financial Institutions Act requires the statutory manager to issue a new balance sheet and profit and loss accounts.
The auditor general notes on page 53 of his report notes that the annual report and financial statements for the year ended December 2016 provided were neither signed by BoU or auditors(KPMG).
Further more, Mr Muwanga notes that Bank of Uganda didn’t provide for statements for a period between 1st and 25th January 2017 and thus he couldn’t establish the details and values of assets and liabilities transferred to DFCU.
The lack of documents/evidence is broad day evidence that BoU officials could have been involved in corruption&fraud.
The failure to follow the law (the financial Institutions Act) to the letter can also be categorised as incompetence.
So where is a accountability for Ugx 478.8 bn that was injected in CBL during statutory management ?
Couldn’t this have caused financial loss to shareholders of CBL,Government and creditors?
The bad loan book
One can’t discuss crane bank donation to DFCU without mentioning the bad loans portfolio.
Page 51 of the special audit report makes reference to the July 31st 2017 memo from Justine Bagyenda,the sacked former Executive Director for commercial bank supervision.
She noted that the bad book was worth Ugx 570.3bn out of the gross loans of UgX 1.159bn,and that it was transfered to DFCU to provide resource for repayment of loans of Ugx 200bn and bridge the shareholder’s deficit of Ugx.439.72bn at the date of take over.
However the auditor general notes on page 52,”I could not establish how consideration of 200bn was derived from a bad book of 570.38bn”.
There is no way how and why a fully collateralized bad book of Ugx 570.38bn could be sold for a peanut of just 200bn
Could this have been connivance between Bank of Uganda officials and the buyer?
The AG further notes that he was not provided with the schedule of loans and corresponding collateral transfered to DFCU,thus was unable to establish the values and categories of loans transfered including performing loans,nonperforming loans and fully provisioned/written off loans.
In a sum,the absence of key documents in such a megha transaction can’t be separated from fraud,collusion,corruption among other possibilities.
Kagenyi Lukka is a current affairs analyst and the next Ikiiki MP.