BoU Scandal: Speaker Rebecca Kadaga letter to PAC-Cosase Chairman on “Re: Re-opening the Investigation into the Bank of Uganda Closure of Commercial Banks by the Committee on Commissions State Authorities and State Enterprises” (10.06.2019)

BoU Scandal: AG Muwanga letter to Deputy Governor of BoU – “Special Audit on the UGX 479bn Injected into Crane Bank Limited by BoU” (04.04.2019)

BoU Scandal: Office of the Leader of the Opposition – Recommendations of the opposition on COSASE report (28.02.2019)

Opinion: Katuntu now have to bite the bullet!

Abdu Katuntu got to keep the position and chairman of the Parliament’s Commissions, Statutory Authorities and State Enterprises (COSASE) on overtime to finish a report on the closure of 7 defunct banks in the Republic. He got the lifeline by the Speaker Rebecca Kagada in Parliament in January, as he wasn’t ready to deliver the report.

Katuntu as the MP who ran the committee decided on when to drop the report, which the report was dropped on the 19^th February 2019. Now, today the IGG letter of the 19^th February 2019 asked the Internal Security Organization (ISO) to look into the investigations and the possible kick-backs for a lenient report, which this was. The Report dropped was sleek, soft and guarded. Therefore, the question of what the COSASE is shielding or didn’t dig into could come into question.

If there was some bankers, some inside Bank of Uganda or anyone else of the Stakeholders of the defunct banks would enforce kick-backs to the Chairman and the Committee wouldn’t be surprising in relations to this is the Republic of Presidential Handshakes. In the Republic where the MPs are paid for voting in favour of favourable bills and motions of the Presidents agenda. Therefore, the initial idea of the IGG fits the state of affairs.

BUT, this is a hit-job, as this is leaked as the COSASE is getting new leadership, as the report has been delivered to the public and to the Parliament. The IGG and AG could act upon the work that Katuntu delivered. Nevertheless, there are more stakes at hand, as there are invisible hands overshadowing, as the cronies and investors, whose could be close to the President could be implicated. That is why the President was so adamant statements about the whole investigation and that it should have been done behind closed-doors. However, that didn’t happen.

Katuntu thought he did good, thought he delivered for the ones he made promises too. He thought with the extended time and promise of leverage, that he wouldn’t be hit. However, the President and his security organization is still on a vengeance. They are retaliating now, because the state suddenly looks into it. Because, the state is trying to save face.

It is weird timing that they are starting to investigate now, as they could have looked into the issues within the BoU before this, as there was plenty of banks closed wrongfully. Still, it didn’t matter then, but now it does. That looks weird and looks like a hit-job.

That Katuntu is now the latest victim… not the last, whose being used, tricked and later discarded. Peace.

BoU Scandal: IGG letter to ISO – Alleged Misconduct of Members of the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) – (19.02.2019)

Uganda Debt Network: Letter to Parliament – “Re: Reject Government Proposal to Issue Promissory Notes USD 379,9M for Construction of international Specialized Hospital in Lubowa (22.02.2019)

COSASE: Parliament of Uganda – “Re: Documents laid before the Cosase by Hon. Odonga Otto and Hon. Elijah Okupa during the inquiry into the Auditor General’s Special Audit Report on closure of Commericial Bank by Bank of Uganda (21.02.2019)

A brief look into the COSASE Report: Digest the lack of due diligence!

Well, sooner or later this report was bound to happen as the deadline of the Parliament’s Commissions, Statutory Authorities and State Enterprises (COSASE) report into 7 defunct banks in the Republic. It had to be interesting to see how the National Treasury or National Bank, the Bank of Uganda handled it, as the Bank have been going around all cowboy and not with protocol. As the proper guidance nor minutes have arrived to the COSASE as the months of investigations has gone on.

As well, the lack of trust between the parties, lawyers and stakeholders itself. Therefore, the report, had to stinking of it, the lack of due diligence and care for delivering proper craftsmanship, where the profession and their ethics are shining true.

Instead the process of investigation have shown utter contempt of honesty and transparency, as documents have gone missing and people have taken trips away, while they were supposed to testify to the Committee.

That is the introduction. Let’s dig into the mess, which was unleashed today on the 21^st February 2019.

“The committee further observed that there are no documents relating to the post closure and management of Teefe Trust Bank assets and liabilities. This further complicates the process of winding up including resolving claims and some securities still in possession of the Central Bank” (COSASE, P: 9, 2019).

“No inventory report was availed in respect of ICB but an inception report for liquidation by the Liquidation Agcnt (KPMG) dated 30^th September 2001” (…)”without a proper inventory report, BoU did not know what it was taking over in terms of entirety of assets and value. Accordingly, BoU acted in breach of section 32 (3), of the FIS, 1993” (COSASE, P: 10, 2019).

Sold on the Same Day:

What further the report states is that the National Bank of Commerce was closed and sold on the same day. This being done on the 27^th September 2012. The takeover and sale took only 6 hours time and was in convention of the FIA. The same actions happen to Global Trust Bank (U) Limited, which was closed and sold on the same day, on the 25^th July 2014. This was also done in convention of the FIA.

While on Crane Bank:

“The auditors produced the inventory report on 21st of December 2016 however, BoU had invited DFCU to bid for the purchase of assets and assumption of liabilities of CBL on 9nd December 2016 and subsequently DFCU submitted the bid on the 20th December 2016 a day before the production of the inventory report” (…) “BoU did not carry out valuation of the assets and liabilities of CBL. BUT relied on the inventory report and due diligence undertaken by DFCU to accept their bid to arrive at the P&A. However, the final inventory report was submitted on 13th January 2017. In essence, the final inventory report was never used in evaluating the bid for the purchase of assets and assumption of liabilities of CBL” (COSASE, P: 12 & 13, 2019).

Selling assets on discounts:

“In the case of ICB, Greenland Bank and Co-operative Brank, the total loan portfolio sold of UGX 135bn included secured loans of UGX 34.5bn which had valid legal or equitable mortgage on the real property and were supported with legal documentation BUT were sold, to M/s Nile River Acquisition Company at 93% discount” (…) “Whereas the GTB and NBC discount percentages of 20 and 30% respectively appear reasonable, the 93% discount in respect of the loan portfolio of ICB, Greenland Bank and Co-operative Bank acquired by M/s NRAC was incredibly outrageous” (COSASE, P: 23-24, 2019).

Winding Up:

“The winding up process of all the defuct banks has taken an unjustifiably long time to settle creditor claims. For Teefe Trust Bank (26 years), Co-operative Bank (20 years), ICB (21 years), Greenland Bank (20 years), NBC (7 years), GTB (5 years) and CBL (2 years)!!! Regrettably, many of the creditors and shareholders have and indeed continue to die” (…) “Due to absence of documents, it was not possible to ascertain whether the UGX.9 1 .22bn used to settle customer claims of ICB, Cooperative bank and Greenland bank went to the bonafide beneficiaries. The absence of documents could among others be attributed to the long delay in concluding the winding up process” (COSASE, P: 39, 50 2019).

This is really just a proof of some of the mismanagement and quotes that proves how the Bank of Uganda didn’t do due diligence. They didn’t fix the issues, neither the work that was needed for the distressed financial institutions, the BoU didn’t follow the laws and statutes. All of the banks seems to be closed without protocol. Without proper documentation, neither overlooking assets and the securities.

Therefore, the Bank of Uganda … have not acted as the Central Bank and having the supervisory role over the financial market. They have surely acted in ill-will and not like they are supposed too. If not, these seven banks shouldn’t been closed like this, even closed and sold within 24 hours. Peace.

BoU Probe: Lukwago statement – “Re: Salient Matters Concerning The Parliamentary Probe Into The Closure of Greenland Bank and Other Defunct Commercial Banks” (12.02.2019)

BoU Scandal: Mmaks Advocates – Press Release (12.01.2019)