National Bank of Commerce Shareholders Demand Shs290Bn In Compensation

Former Prime Minister Amama Mbabazi (C) and other shareholders of National Bank of Commerce appearing before COSASE on Monday. PHOTO BY Max Patrick Ocaido

Former Prime Minister Amama Mbabazi (C) and other shareholders of National Bank of Commerce appearing before COSASE on Monday. PHOTO CREDIT Max Patrick Ocaido

Bereaved former shareholders of National Bank of Commerce appearing before the parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), which is investigating Bank of Uganda (BoU) over the controversial closure of seven commercial banks, on Monday demanded that Bank of Uganda compensates them with a financial gain Shs290bn.

The unfortunate former shareholders include former Prime Minister John Patrick Amama Mbabazi, businessman Amos Nzeyi, former minister for privatization Mathew Rukikaire and retired Supreme Court judge Justice George Kanyeihamba. They were appearing before cosase to explain the circumstances under which their bank was closed.

Mbabazi, when asked to explain, accused Justine Bagyenda, the former supervisor of commercial banks of not following the law in the process of closing their bank which was not undercapitalized. Mbabazi said the manner in which the Bank was closed was unfair and not transparent.

“When they were in the process of closing the bank, after they seized it with security operatives, I called Gen. Kayihura who was the IGP then, I told him, ‘Kale, this is happening at NBC, are you aware?’ he said, no, I told him, please follow it up and let me know, and if it’s a robbery, please take action. He neither came back to me nor did the actions at the bank stop,” Mbabazi told the committee.

The shareholders said they could have saved their bank but they accused Ms. Bagyenda of being hell bent on closing the bank and selling it off yet it was not undercapitalized. According to the shareholders, Bank of Uganda had told them that their bank was undercapitalized and that they were required to recapitalize it with shs7b within seven days. They claim to have raised the money in four days. But despite this, the bank was seized off and sold within one day!

“The bank of Uganda therefore shouldn’t have chosen the drastic decision of closure even having raised the amount of money they had asked for. This points to the ulterior motive, that they had their own other intentions for closing the bank, and for that, we demand Shs290B in compensation for the losses that we incurred,” Mathew Rukikaire, one of the former shareholders told the committee.

Mbabazi is not the first person to accuse Bagyenda for misusing her powers in closure of Banks, COSASE committee members and its Chairman Abdul Katuntu last month accused the former Executive Director in-charge commercial Banks of usurping the powers of the legal department of the bank after discovering that she took over the drafting of the terms of engagement between Bank of Uganda and MMAKS which documents could not be traced by the committee.

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