Crane bank assets: Central Bank questions DFCU's compensation bill

Bank of Uganda has rejected a proposal by DFCU bank to compensate it after the commercial bank indicated its willingness to vacate 48 properties that belong to Meera Investments Limited.

The properties used to house the defunct Crane Bank before it was sold to DFCU by the central bank in 2017.

We have been told that DFCU had demanded Shs 47 billion from the central bank as a form of compensation for accepting to leave.

However BoU has rejected the proposal, according to insider sources at the central bank.

We have been told that DFCU had requested for a meeting over this matter.

But some people said the figure (Shs 47 billion) was exorbitant considering that when DFCU took over Crane Bank, it had valued the same assets at Shs 10 billion. Two years later, it is highly unlikely that they have appreciated to that figure.

"The governor has stood his ground and does not see the need of compensating DFCU," a source said describing what transpired in an internal meeting.

Sources said the standoff has caused some friction between DFCU and the central bank

DFCU bank in a letter dated September 12, 2019 informed BoU of its decision to exercise its option to rescind its interest in purchasing the 48 properties pursuant to clause 8.7 of the Agreement.

As part of the rescinding of the purchase, DFCU return to Bank of Uganda certificates of title for Meera Investments Limited ‘and requires Bank of Uganda to pay dfcu the new book value of properties or Shs47 billion recorded in the assets and inventory compilation as October 20, 2016. But the bank interestingly had valued the properties at Shs10 billion.