By Kagenyi Lukka
Parliament’s committee on Commissions, statutory authorities and state enterprises (cosase) has for the past one month been involved in a marathon of activity.
For the time that the committee members have invested in probing the crisis at Bank of Uganda, they deserve to be hailed. For the first time in Uganda’s history, Bank of Uganda (BoU), which had for long been shielded from public scrutiny, has become a regular subject of debate across board.
All this, thanks to the auditor general’s report on defunct commercial banks 1993-2017 which evidently unearthed the rot that had for long been covered at BoU by its top brass managers, key of whom, the biggest punches have been thrown at Justine Bagyenda who headed the directorate of commercial bank supervision between 2004 and 2017.
Bagyenda’s more than a decade stay on the top of the supervision department is so critical because this was the period when more than half of defunct banks folded, but above all, even a small Teefe that was closed in 1993b has not been fully dissolved.
Bagyenda is among others; accused of stealing of key documents from the central bank, hawking commercial banks, selling them on phone, not having minutes while selling some at a 93% discount to a ghost offshore company, Nile River Acquisition company.
The attention is now on crane bank, which at the time of its questionable sale was Uganda’s third largest commercial bank boasting of over 170,000 clients.
Before attention turned to crane bank, cosase was investigating the mystery around national bank of commerce (nbc).
BoU Governor Emmanuel Tumusiime-Mutebile, Prime Minister Ruhakana Rugunda, Former Prime Minister Amama Mbabazi and city businessman Amos Nzeyi were among the major shareholders that were wrangling with minority shareholders; fights that bogged down the bank, triggered cumulative bad loans and starved it of capital base.
Mr Benedict Ssekabira, BoU’s Director for Financial Markets Coordination, week revealed that the central bank took the decision to close NBC in 2012 on grounds that it lacked enough capital to keep afloat and was also being undermined by disputes between minority and majority shareholders.
BOU officials further admitted that NBC was casually given away without minutes; all transactions were sealed through a phone call.
“When that decision was taken, the process to acquire an acquirer who would give comfort to depositors to easily access their money was deployed in confidence. That process was conducted on phone. All the other banks were shy, it is only Crane Bank that was strong enough to swallow NBC. Crane Bank was strong and willing to transact on this and we proceeded to write a confidential agreement,” Mr Ssekabira said.
However my closed sources revealed that the takeover of nbc by crane bank limited was a forced decision by Justine Bagyenda.’Justine Bagyenda called us and insisted, you must take it’, a source opined to me.
Crane bank never paid any penny for NBC.Crane bank would collect loans and BOU would take 80% while cbl 20% as collection fees.
This was realized in month between April and June 2014.