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Former Dfcu Chief of Business and Executive Director of Dfcu Bank, William Ssekabembe being put on oath
Former Dfcu Chief of Business and Executive Director of Dfcu Bank, William Ssekabembe being put on oath. Photo by Max Patrick Ocaido

Dfcu Acquired Crane Bank Properties Without Evaluation Report - COSASE

Dfcu officials were for the same day appearing before COSASE after they were on Wednesday kicked out for presenting unauthentic documents regarding the sale and purchase of Crane Bank
posted onFebruary 7, 2019
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By Max Patrick Ocaido

The parliamentary committee of Commissions on Statutory Authorities and State Enterprises (COSASE) has revealed that Dfcu acquired Crane Bank properties without an evaluation report.

The committee further understood that Dfcu deliberately undervalued all the 26 properties of defunct Crane Bank and subsequently made under declaration to the Uganda Revenue Authority (URA to evade stamp duty).

Dfcu officials were for the second day appearing before COSASE after they were on Wednesday kicked out for presenting unauthentic documents regarding the sale and purchase of Crane Bank. 

During the Thursday meeting, the MPs probed Dfcu team led by chairman board of directors Jimmy Mugerwa on how they arrived at shs200bn price to Bank of Uganda yet there was no proper due diligence that was conducted before the takeover. 

Agnes Tibayeita Isharaza,  Head of Legal department, Dfcu on Thursday told the committee that they took over Crane Bank before carrying out an evaluation report on the properties of Crane Bank. She added that they relied on an evaluation report from a private valuer who conducted "a desktop evaluation" without visiting the properties. 

On Wednesday, Dfcu officials told the committee that they had an evaluation report from the Government Chief Valuer. However, today(Thursday), the officials instead submitted an evaluation report which was conducted by private valuer rather than government chief valuer. 

To MPs' surprise, Tibayeita said that Dfcu took over Crane Bank on 25th January 2017 before their private valuer conducted the evaluation between April and May 2017 after the takeover.

"Bank of Uganda confessed that they did not make their own due diligence but actually relied on the evaluation and inventory of the buyer-Dfcu, now don't you actually find it strange that you carried out your evaluation and used the same figure to buy the Bank from Central Bank?" Outgoing COSASE chairman Abdu Katuntu asked Juma Kisaame, former MD of Dfcu. 

"How can you acquire property that you have not valued?"

According to Anita Among, COSASE vice chairperson, there is a contradiction in figures between the evaluation report presented by Dfcu and the actual report presented by the private valuer.

"For example, I have seen the Dfcu evaluation report valuing one of the Crane Bank properties at shs500m and yet the private valuer actually values it at shs1.2bn. It is clear that Dfcu undervalued the 26 properties of Crane Bank," Among said. 

Juma Kisaame in his submission said that it is Bank of Uganda that is in a better-placed position to explain why they did not conduct an inventory on Crane Bank. 

"On our part as Dfcu, we carried out due diligence and had an offer of shs200bn. Bank of Uganda is best placed to answer," he said. 

At the same meeting, MPs subjected former Dfcu Chief of Business and Executive Director of Dfcu Bank, William Ssekabembe and Juma Kisaame on oath after they gave contradicting information regarding the sale and hand over of Crane Bank. Kisaame continuously hesitated to give the committee the exact amount of money that dfcu paid in acquisition of Crane Bank. This prompted the MPs to put him on oath before he gave a break down of the figure that is estimated at about shs1.5trillion. 

Ssekabembe told the committee on Thursday that Edward Katimbo, statutory manager of Crane officially handed over all properties to them on the day of the takeover. This contradicted what Katimbo told the committee in December when he said that Dfcu simply hijacked the properties without a formal handover and that he was even in his upcountry farm only to see on social media photos of Dfcu officials taking over the defunct Bank.

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