MPs on the parliamentary committee on Commissions, Statutory Authorities and State Enterprises (Cosase) have tasked Bank of Uganda officials to avail accountability for the Shs 478bn injected into Crane bank for liquidity support before it was sold off to Dfcu bank.
Crane bank needed only Shs 157bn to stay afloat but was closed on October 30, 2016 by the central bank and four months later sold off to Dfcu bank for Shs 200bn. Governor Emmanuel Tumusiime Mutebile then said the action was taken upon a determination that Crane bank was a significantly under-capitalised institution and posed systemic risks to the stability of the financial systems in the country.
Mutebile stated back then that the continuation of Crane bank activities was detrimental to the interests of its depositors because the bank had fallen below the 50 per cent of the statutory requirement of Shs 25 billion. He added that the problem was partially caused by a number of bad and doubtful loans that could have undermined the performance of the bank.
Now the chairperson of Cosase, Abdu Katuntu says that his committee wants to ascertain whether the money that was pumped into Crane bank by the central bank before its closure and sale fulfilled its intended purpose.
"What is not in doubt is that Bank of Uganda actually pumped in Shs 478bn. That is not in doubt. What we would like to satisfy ourselves with is, at the tail end in Crane bank was this money utilised in accordance to the purpose for which it was remitted? This money eventually goes to the statutory manager, he’s the one who utilised it and we want the accountability because it is true Bank of Uganda remitted this money." said Katuntu.
BOU staff, Katimbo Mugwanya who was appointed Crane bank statutory manager sought clarity on the kind of evidence the committee requires for the Shs 478 billion injection. Katimbo last week told the committee that he did not hand over any progress report on his duties in Crane bank and that he got information about the final sale of Crane bank on WhatsApp while on his farm.
Also, close to 5,000 loans that were taken over by Dfcu bank from Crane bank were found by the auditors attached to the committee to have been duplicated. Four months after the closure, the central bank entered into a purchase of assets and assumption of liabilities agreement with Dfcu for a deferred payment of Shs 200 billion for the Crane bank's loan portfolio.
Dfcu has so far made a payment of Shs 98.9 billion of the money which is expected to be cleared in 36 months. Katuntu said that a review of a CD presented by the central bank has so far indicated duplication of 4,458 account loans and advances which were transferred to Dfcu. The CD contains details of the Crane bank bad book which was sold to Dfcu.
Katuntu said that it would be difficult for his committee to proceed with investigations until the auditors exhaust the documents on the CD and avail a comprehensive report on the matter. He said it is not yet clear if the accounts were duplicated before or after the takeover of Dfcu bank.
Katuntu said that they are yet to ascertain where the problem emanates from. Cosase has now asked the central bank to produce a series of documents on the sale of Crane bank. These include loan listings as at October 20, 2016, loan harmonisation schedules between October 20, 2016 and January 27, 2017, including interest, principal, recoveries and periods.
The others include loan classification schedules, a soft copy of the inventory report, a handover report of the then director commercial banking Ben Sekabira, and a statement of the crane bank liquidation costs.