BoU officials on tenterhooks as MPs start probe into sale of banks

The Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) will today start inquiring into the controversial sale/take-over of eight commercial banks by the central bank over the last two decades.

The committee chaired by Abdu Katuntu, the Bugweri MP will rely on a special audit report of the central bank's activities authored by the Auditor General.

The report found out that BoU could have irregularly sold off Crane Bank, Teefe Bank, International Credit Bank Ltd, Greenland Bank, The Co-operative Bank, National Bank of Commerce and Global Trust Bank.

The 94-page report indicates that BoU did not follow any guidelines/regulations or policies in the sale of Crane Bank to dfcu Bank last year and in the closure of the other banks.

The Auditor General said the central bank did not carry out an evaluation of the assets and liabilities of Crane Bank before they were transferred to dfcu Bank.

BoU officials expected to appear before the committee are:Governor Emmanuel Tumusiime-Mutebile, his deputy Louis Kasekende;  former BoU director-in-charge of banks supervision, Justine Bagyenda and the dfcu managing director, Juma Kisaame.

MPs are  expected to question Mutebile on how BoU paid billions of shillings as consultancy fees to several law firms in the sale of the banks.

For instance, in the period when BoU was managing Crane Bank Ltd, it said it used Shs4b in the hiring of two external law firms – MMAKs (Shs3.9b); Cohen and Collins Solicitors and Notaries (Shs17.4m).

However, the AG indicates the budget for MMAKS Advocates and AF Mpanga Advocates – the external lawyers hired by BoU in Crane Bank case before court kicked them out over conflict of interest, was never disclosed.

Katuntu confirmed yesterday that they were ready to start the probe.

“We are going to meet as a committee and plan how to scrutinise the Auditor General’s report,” Katuntu said.