Bagyenda defends sale of closed banks assets
- Written by URN
Justine Bagyenda
The former Bank of Uganda (BoU) executive director for supervision of commercial banks Justine Bagyenda has defended a decision by the central bank to sell off loan portfolios for three closed commercial banks, in the absence of valuation reports.
The loans were sold off at an astonishing discount of 93 per cent. According to the auditor general, the debt portfolio comprised of secured, poorly secured, unsecured and unknown loans amounting to Shs 135 billion from Greenland bank, International Credit bank and the Cooperative bank.
The Greenland bank loan portfolio was Shs 66 billion, the Cooperative bank portfolio stood at Shs 47 billion while the International Credit bank portfolio stood at Shs 21 billion. Out of the total Shs 135 billion loan portfolio, only Shs 34 billion was secured with properties.
However, in December 2007, BoU, with advice from JN Kirkland Consultants, signed an agreement with Nile River Acquisition Company to sell the debt portfolio for the three banks at $5.25 million. During the time, the US dollar was trading at Shs 1,676, which amounted to Shs 8.8 billion.
Evidence before the probe team indicates that the letter allowing Kirkland Consultants to ignore open bidding and select an exclusive buyer for the entire loan portfolio was signed by Bagyenda on September 25, 2007.
Bagyenda was tasked by the parliamentary committee on Commissions, Statutory Authorities and State Enterprises (Cosase) to explain her basis for selling the loan portfolio at a low price.
Bagyenda said that for over eight years, the central bank had been selling off the assets of the three banks and they were of the opinion that those that they had failed to sell were not that good. She insisted that the central bank hired M/S Bageine, a private firm to carry out the valuation of the bank assets. However, she could not table the valuation reports before the committee.
Cosase chairperson Abdu Katuntu asked Bagyenda to work with the current team at the central bank to ensure that all valuation reports are availed to determine the next course of action for the committee. However, Bagyenda declined, saying she cannot return to the bank, in the wake of allegations that she stole documents from the central bank.
Bagyenda's appearance before the committee yesterday morning ended weeks of speculation about her whereabouts. She had snubbed the committee on three various occasions, sending in communication that she had traveled to Houston, in the United States for the International Trauma Summit.
Clad in a purple suit, Bagyenda arrived at parliament by 10am, in the company of her lawyer Allan Nshimye. They had to wait for more than 30 minutes before the first legislator arrived. Unlike other occasions, Bagyenda was composed all through the meeting, while responding to queries from each of the members.
Bagyenda returns before the committee today Tuesday for further questioning in relation to a report by the central bank security director Milton Opio which detailed how she smuggled bags which are suspected to have been containing critical documents.
Two of Bagyenda's aides; a driver and a bodyguard, are currently held by the parliamentary police on grounds that they lied under oath after giving contradicting accounts regarding the stolen documents from the central bank.
Comments
At the time of selling these properties the dollar rate was 1,676; and now it stands at 3,750 with most of the team members still managing the economy at macro level.
I need to be convinced that at one time and under Mutebile; the sky rocketing exchange rate will ever be contained.
Secondary, and with all the experts in that bank and assuming the person in charge was a tomato seller in Owino; how dare you sell goods at 93% discount!!! and you expect to be in business tomorrow??
How does someone sit in office on Kampala road and value properties scattered across the country? If BOU has failed its mandate including supervising the loan portfolios for commercial banks; then what is the work of Mutebile and friends. If the inventory list for closed banks is missing; are we sure the reserves are safe? Somebody should take responsibility and go
In other words, a good name is better than fraudulent wealth. You can't pervert other people's sweet and blood for personal glory and get away with it.
Just a few curiosity questions: (a) Did ordinary depositors lose their savings in those closures?
(b) Did PJAM own any of those closed banks? I ask this because Mr Mbabazi claimed [during one of those live presidential election debates] that those banks closures were related to his perceived bid for the presidency at the time.
In which case, being political banks rather than commercial banks, their closure should not bother the rest of us. (c) Seeing the seated picture of that old lady [her own words], my gut feeling is that her legs are "ours", we the northerners. Any explanation relating to that apparent mismatch of names and legs?
I am assuming that legs remain a reasonable guesstimate of one's regional ID in Uganda, as the Late Okot p'Bitek long ago stipulated. End of curiosity list.
If all loans were recovered and all assets sold, they would still not clear the debt owed by banks to BOU. This was a write off.
But the owners/managers did not go to jail, after stealing deposits?
But now parliament is trying to cleanse the fraud? Bagyenda is the only sober person in this mess.
If two witnesses give contradictory accounts does that mean they are lying, or, that they recollect events differently?
Do conflicting accounts mean perjury?
Katuntu is pursuing a predetermined outcome. This is not an inquiry. It is a kangaroo court. So much for 'opposition'.
The statutory requirement for detention of suspects is 48 hours. Why are the two still detained? They should be charged or released.
But Gwok, watch out about northern legs. They are not that dry like those of the Egyptian Princess, Nefertiti's mummy.