The Bank of Uganda (BoU) liquidated and sold off seven commercial banks without carrying an inventory of the assets and liabilities held by the banks.
This was disclosed on Monday as BoU officials led by the Governor Prof. Emmanuel Tumusiime-Mutebile appeared on Monday before parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase).
“At the time of closure of Teefe, the law was the 1969 Banking Act and the nature of the documents required at that time did not include an inventory. So we do not have an inventory. We have provided information relating to the financial institution of Teefe; the assets and liabilities,” BoU Deputy Governor told members of Cosase.
Joseph Sewungu [Kalungu West, DP] urged Committee Chairman Abdu Katuntu to compel BoU officials to present all documents. “With your powers, you have to compel BoU to bring these documents. They have them,” he said.
MP Moses Kasibante (Rubaga North) added: “We are talking about banks that were closed before they failed to adhere to the normal standards. Now we are speaking to people who are confessing that there is something wrong with supervision at BoU.
When BoU explained to the AG at the time if this report, it promised to search in the archives. When we were here last time, it asked for two days and got four. Now it is confession that this bank has no reason why it closed Teefe. Was the inventory report misplaced or it was never there?”
Another legislator Francis Mwijukye (Buhweju) said BoU officials were deliberately refusing to hand over documents of the inventories, “In respect to the inventory report not being there, does BoU know what it took over? Is it deliberate that they do not want to provide this report?” He said.
Beatrice Among (Kumi Woman MP) said: I do not want to believe that there is no inventory report. What do you use to make supervision reports?
Dr.Tumubweine Twinemanzi, Executive Director Supervision, BoU, said they would continue to search in the archives to get the information.
The members’ stance on having all documents forced Katuntu for the second time to kick out Bank Tumusiime-Mutebile and his juniors for failure to bring all documents related to the liquidation and sale of seven commercial banks.
On November 2, 2018, Cosase kicked Tumusiime-Mutebile and his staff for failure to bring all the required documents. The MPs on the committee were surprised again on Monday that the bank officials did not again come with all the documents, more so those relating to Teefe Trust Bank.
As Katuntu has tasked the Executive Director for Supervision Dr. Tumubweine Twinomanzi to present the required documents by 1PM on Wednesday and ordered that the BoU team appears again on Thursday at 10 AM without fail.
The documents must have a cover letter, addressed to chairperson, Cosase. “Make sure chairperson receives them in person,” Katuntu told Twinomanzi who joined BoU in February at the time when in a controversial way to replace Justine Bagyenda who had been sacked by Tumusiime-Mutebile as he made changes in senior positions.
“Statement of accountants presented makes no sense. It is so anonymous. Documents should answer the queries of the committee as raised by the auditor general,” Katuntu said as overruled his members on asking specific questions, reasoning that all documents have to be available before the MPs can raise such queries.
Katuntu also has asked that BoU staff appear together with their agents who were involved in the transactions to answer specific queries.
The defunct banks of interest are; Teefe Bank (1993), International Credit Bank Limited (1998), Greenland Bank (1999), Cooperative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and sale of Crane Bank to dfcu in 2017.
Meanwhile, Mutebile while addressing the committee members cautioned that, resolution of banks is a complex exercise and each bank has had its own circumstances under which it was resolved.
“There are also a number of challenges involved including court cases, I want to appeal to this committee to be mindful of the ongoing court cases as they might have an effect on how much information we shall reveal during this probe,” he said.
Mutebile said they carried out bank resolutions before Bank of Uganda identified other banks that purchased assets of the defunct competitors.
In his investigation of BoU, Auditor General, John Muwanga, as for all documentation in relation to all closed banks-specifically the inventory report, loan schedules, customer deposit schedules, statement of affairs and any reports supporting assets and liabilities relating to customer information, but BoU did not avail all these.
“However, I was not availed with sufficient information relating to Teefe Bank to enable me fulfil the specific audit objectives. BoU explained that it will continue to search in the archives to get this information,” he said in his special audit report of BoU on defunct banks he published on August 27, 2018.
The MPs are to use the report to pin Mutebile and his juniors.