By Kagenyi Lukka
There is all evidence to believe that a section of Bank of Uganda officials didn’t do their job. They were negligent, incompetent or corrupt. Parliament’s probe into the irregularities that surrounded the closure of defunct commercial banks speaks to this conclusion.
The auditor general’s report on defunct commercial banks revealed that there were fundamental flaws in the processes that led to closure of; Teefe Bank (1993), International Credit Bank Ltd (1998), Greenland Bank (1999), The Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and the sale of Crane Bank Ltd (CBL) to dfcu (2016).
And as the torch is being shined on crane bank, Bagyenda(former Director for supervision), Louis Kasekende (Deputy governor) and Katimbo Mugwanya (Cbl’s statutory manager) are yet to convince the committee on commissions, statutory authorities and state enterprises(cosase) and the general public that it was worth injecting Ugx 478 billion in the formerly excellent crane bank limited.
Crane bank needed only Shs 157bn to stay afloat but was closed on October 30, 2016 by the central bank and four months later donated to Dfcu bank at a giveaway credit of Shs 200bn.Bank of Uganda then claimed that their impugned action was taken upon a determination that Crane bank was a significantly under-capitalised institution and posed systemic risks to the stability of the financial systems in the country.
While appearing before cosase on 17th December 2018, the three officials couldn’t ably explain the rationale of investing this huge sum in absence of plausible documentation.
“What is not in doubt is that Bank of Uganda actually pumped in Shs 478bn. That is not in doubt. What we would like to satisfy ourselves with is, at the tail end in Crane bank was this money utilized in accordance to the purpose for which it was remitted? This money eventually goes to the statutory manager, he’s the one who utilized it and we want the accountability because it is true Bank of Uganda remitted this money.” Said cosase chairman, Abdu Katuntu.
Katimbo Mugwanya as a statutory manager didn’t do his role, and indeed, the auditor general’s report exposed his incompetence by reporting that he was unable to prepare financial statements for crane bank limited during the period he served as a statutory manager.
On top of this, he fallaciously claims that the sole reason for not handing over any progress report on his duties in Crane bank and that he got information about the final sale of Crane bank on WhatsApp while on his farm.
Another chief in this episode was Justine Bagyenda who one wonders whether she was mentally astute during the whole crane bank sale because she is unable to explain basic coordinated facts related to cbl while also claiming to be of old age.
The sale of cbl to dfcu without minutes and an interest free credit, exorbitant payments to external lawyers were among a raft of omissions that Bagyenda committed as an executive director for commercial supervision.
Parliamentarians have also pressed Louis Kasekende who was Justine Bagyenda’s immediate supervisor, and an overseer of the crane bank muddle for answers to justify this rooftop expense. He too can’t justify it.
The bigger question still remains, if crane bank only need Ugx 157 billion to stay afloat, why did Bagyenda, Kasekende and Katimbo Mugwanya inject in Ugx 478 billion but still failed to save it and gave it away casually?