BOU Probe: COSASE To Meet Shareholders Of Seven Banks Closed By Bank Of Uganda

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Former shareholders of the seven commercial banks controversially closed down by Bank of Uganda (BoU) have been summoned to appear before the parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) starting next week.

First to appear before cosase will be former shareholders of National Bank of Commerce (NBC) and Teefe Bank together with Nile River Acquisition Company (NRAC). They will testify about the circumstances that led to the closure of their banks.

Offshore defunct NRAC was used by BoU to buy the assets and liabilities after the closure of International Credit Bank Ltd (1998), Greenland Bank (1999) and the Co-operative Bank (1999).

The firm bought the total loan portfolio worth Shs135b, including secured loans of Shs34.5b which had valid, legal or equitable mortgage on the real property, according to a forensic audit by the Auditor General.

The former shareholders of NBC, who are expected to be cross-examined by the committee, will include Prime Minister Dr Ruhakana Rugunda, Governor Tumusiime Mutebile, former Prime Minister Amama Mbabazi, and businessman Amos Nzeyi.

MPs will then meet former shareholders of International Credit Bank (ICB), Cooperative Bank, Crane Bank Ltd and dfcu -the bank which took over the assets and liabilities of both Global Trust Bank (GTB) and Crane Bank. The committee will also hold meetings with the BoU Board of Directors and technocrats from the Finance ministry.

BoU officials are expected to respond to what Ms Justine Bagyenda, the former director of Supervision for Commercial bank, testified about the closure of banks last December.

Lawyers from Masembe, Makubuya, Adriko, Karugaba & Ssekatawa (MMAKS Advocates) will also be quizzed to explain how much BoU paid them as legal fees for several cases involving the closed banks.

MMAKS will also be required to clear the air over whether BoU hired them as transaction advisers in the disputed Crane Bank takeover at a fee of $251,045 (about Shs943.3m).

 

 

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