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Bank of Uganda doesn’t know when Teefe Bank was closed

Drama ensued at parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) after officials from the bank of Uganda failed to identify a clear date when Teefe Trust bank was closed.

Governor bank of Uganda Emmanuel Tumusiime-Mutebile presented documents one saying the bank was closed in February 1993 and the other read November 4, 1993.

Teefe Trust Bank was closed on account of undercapitalization.

Teefe Trust Bank was supposed to be closed under The Financial Institutions Statute (FIS) 1993, yet Bank of Uganda officials say they used the Banking Act 1969 to close the Bank.

However, MPs would later establish that it was the then Finance Minister Jehoash Mayanja Nkangi who closed the bank on November 4, 1993 in a letter he wrote to BoU. But the minister didn’t have powers to close the bank under FIS.

The legal team of BoU was confused as whether the late Mayanja had or did not have the powers to close the bank. Mayanja was appointed Minister of Finance, Planning and Economic Development from 1992 until 1998.

There was also confusion when BoU to explain under which legal regime Teefe Trust Bank was closed.

At one point they said it was closed under the Banking Act 1969, yet the existing law was the Financial Institutions Act.

The MPs established that the bank was closed under FIA. But Deputy Governor Dr Louis Kasekende earlier on said it did not apply, which was not true.

Committee Chairman Abdu Katuntu almost lost cool when he asked Ben Sekabira, former Executive Director in charge of supervision where the 23 properties of Teefe bank are? Sekabira responded “We have them” which was a bit blanket, which irritated Katuntu.

The BoU team came with Dr William Samson Kalema and former Auditor General (AG) James Kahooza who have served on its board.

But they were asked to leave because of their conflicting roles. Kalema served on the boards of The Cooperative Bank and Dfcu Bank yet at the same time served on BoU board headed by Tumusiime-Mutebile.
Cosase Chairman Abdu Katuntu, said Kalema and Kahooza would be called later to answer specific queries as investigation continues. But when asked Kahooza said he didn’t audit Teefe Trust Bank but BoU.

“I was auditing Bank of Uganda,” he said, forcing Katuntu to ask that he leaves.
Dr Kalema on the other hand wanted to remain in the committee room, saying he could answer queries as regards BoU closure of banks but Katuntu insisted he leaves as it was hard to establish the capacity he had come in given his roles in Cooperative Bank and BoU.

The team also presented Inventory report of Teefe Bank for February 1993 and other documents related to Teefe Trust Bank. Katuntu said he had handed the copies of papers to the Office of the Auditor General John Muwanga for auditing.

He received the copies yesterday in the evening.
In his special audit report of BoU on defunct banks Muwanga says he was not given documents of Teefe Trust Bank.

“I was not availed with the Inventory report, loan schedules, customer deposit schedules and statements of affairs of Teefe Trust Bank to enable me to fulfil the specific audit objectives.
Due to this limitation, I could not assess the status of the assets and liabilities of Teefe Trust Bank from closure to date,” Muwanga said.

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