Assets of Cooperative Bank and two others sold at 93 percent discount

Assets of three commercial banks were sold out by the Central
Bank at a 93% discount, Parliament has established.

The banks; Greenland Bank, International Credit Bank (ICB) and the
Uganda Cooperative Bank (UCB) had their assets sold at $ 5 million (UGX 8 billion at the exchange rate then).

The Parliamentary Committee on Statutory Authorities and State
Enterprises (COSASE) heard the shocking revelations as it quizzed Bank
of Uganda (BoU) Governor, Prof. Emmanuel Tumusiime Mutebile, his
deputy Mr. Louis Kasekende and other departmental heads.

BoU is also accused of selling assets of ICB, Greenland Bank,
UCB, Global Trust Bank and the National Bank of Commerce (NBC) worth UGX 164 billion, at a discount rate of 80 percent, yielding only UGX 32 billion.

Worse still is BoU’s resolve to sell ICB, Greenland
Bank and UCB, with a total loan port folio of UGX 135 billion which
included secured loans of UGX 34.5 billion (with valid legal
documentation) to Nile River Acquisition Company at
another outrageous discount of 93 percent.

Parliament heard that customer loans inherited from closed banks were
sold at an undervalued rate.

The Committee comprises; Bugwere County Member of Parliament (MP), Hon. Abdul Katuntu, Mbarara Municipality MP, Hon. Michael Tusiime, Hon. Medard Lubega Segona, and Hon. Anita Among, among others.

The legislators were appalled by revelations that Nile River Acquisition, the company that supposedly acquired the assets of the three defunct banks; UCB, Green Land Bank and ICB, was non-existent.

Parliament heard that the Cooperative Bank that was formed in 1964
and closed in 1999, under unclear circumstances was
bought by a ghost firm based in Mauritius.

Mr. Michael Tusiime (Mbarara Municipality) castigated the central bank for
failing to give the committee clear explanations of why and how the seven commercial banks were sold.

“I still believe that BoU acted in the absence of guidelines, regulations or policies as they closed The Cooperative Bank in 1999,” Mr Katuntu said.

Parliament summoned the former supervisor of BoU, Ms. Justine
Bagyenda and two other staff; Mr. Apollo Obbo and Mrs Margaret Matovu
who supervised the selling of the defunct banks to appear and explain
on Wednesday 21 November 2018.

END.

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