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Closed banks: BOU staff hid liquidation reports from governor

Bank of Uganda governor Tumusiime-Mutebile

Bank of Uganda governor Tumusiime-Mutebile

The central bank governor Emmanuel Tumusiime-Mutebile has said that his juniors never furnished him with reports on the liquidation of at least three closed banks.

Bank of Uganda is a facing a parliamentary probe, triggered by a 2017 forensic audit report by the the auditor general John Muwanga on the irregular operations of the bank and the controversial closure and sale of several commercial banks since 1993. 

And now, Mutebile said as governor, he told the parliamentary committee on Commissions, Statutory Authorities and State Enterprises (Cosase), that he was never briefed with liquidation reports for International Credit Bank Limited, Greenland bank and Uganda Cooperative bank. The three banks were closed in the period between 1998 and 1999. 

The other banks whose closure is under probe include Teefe Trust bank, Greenland bank, National Bank of Commerce, Global Trust bank and Crane bank. 

In his report, the auditor general observed that no asset movement schedule or ledgers indicating assets at closure, assets sold, selling price, a period of sale, assets not sold, performing and nonperforming loans, was provided to support asset movements in the statement of affairs of the three closed banks.

"…Although the statement of affairs indicated that all the physical assets and customer loans had been sold, Bank of Uganda records indicated that the liquidator did not sell some of the assets previously owned by Cooperative bank," reads the audit report.

Muwanga said that because of the incomplete asset movement schedules, he was not able to verify the movement of assets from Shs 117 billion at closure to Shs 19 billion as stated in the statement of affairs of June 30, 2016.

Cosase chairperson Abdul Katuntu demanded for the reports showing the movement of assets at the time the central bank was managing the liquidation of the banks.

"There were regular reports and in those reports you would be able to see movement of assets. However when BOU now directly took over, these reports are not there. Now that these reports are not there, the auditor general could not verify the movement of assets. So the questions are; why are there no reports during a time when you were there in managing the period of liquidation yet the other professions were providing the reports? And those reports would indicate movement of assets. That’s the query." said Katuntu. 
 
Ben Sekabira, the director financial markets development coordination said that the situation in Greenland Bank was different as the auditors were engaged from day one, and there was an inventory conducted as the issues in Greenland were more challenging.
 
"Frequent reporting was not required. These are the differences that existed. BOU did not want to report to itself, it wouldn't issue a report on itself, so the decision was made to appoint auditors. Because it is expensive, you can't do an audit every year," he said.
 
Katuntu questioned whether the central bank had dedicated an internal person to manage the liquidation process and whether the person was not reporting to the governor. The Cosase committee learnt that the role of a liquidator had been assigned to Sekabira alongside audit firm, KPMG.
 
But BOU governor Tumusiime-Mutebile said he never received any reports of the liquidation process. Sekabira told the committee that he had been reporting to someone else below the governor. 

"Mr chairman, I’m sorry I don’t remember receiving any reports about this matter…Sekabira says he had no reports for me because he was far from me - below me. He was reporting to somebody else but he didn’t say who it was…so who’s this person?" Mutebile wondered a now angry Mutebile. 
 
Although he first feigned ignorance saying many years had gone by for him to remember, Sekabira eventually mentioned the embattled former executive director supervision Justin Bagyenda, a one Apollo Obbo and Margaret Matovu as the people he was reporting to. 

The committee resolved to issue summons to Bagyenda to appear and explain why she and others never furnished the governor with reports regarding liquidation of assets of some of the closed banks. Katuntu directed that the three appear on Thursday alongside BOU other officials.

Comments

+5 #1 kabayekka 2018-11-20 08:29
The appointing authority for such dodgy Bank of Uganda staff is presently busy campaigning with lots of money so that his government can continue to run the national economy of this country for more years.

This sort of lax financial mismanagement is going to impact negatively on the livelihood of our children and grandchildren.
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+1 #2 Lakwena 2018-11-20 14:51
In other words, so much ado without any compelling consequences.
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+1 #3 Treva 2018-11-20 16:29
There is too much evil everywhere. Where will all this end? The blind leading the blind.
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