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Stanbic backs probe into senior executives over insider dealing

“Stanbic Uganda acknowledges that the matter is subject to further court proceedings. Since the matter is before a court of law, the Bank is unable to publicly discuss the merits of its case at this time.”
posted onSeptember 28, 2020
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Stanbic Bank pledged to work with investigators to help settle the case in which its senior executives are accused of illegitimately selling a client’s property in a foreclosure move.

In a Monday statement, the bank acknowledged accusations have been leveled against its workers but noted that it couldn’t discuss the matter as it was already before court.

“A criminal complaint against some of our employees arising from a property foreclosure process following a consent judgment against one of our clients has been brought to our attention, the bank said.

“Stanbic Uganda acknowledges that the matter is subject to further court proceedings. Since the matter is before a court of law, the Bank is unable to publicly discuss the merits of its case at this time.”

The said property is located in Luzira and owned by Macdowel Ltd. The director of the company Beatrice Odongo in a September 23 letter wrote to the Criminal Investigations Directorate, notifying them that they had failed to re-obtain titles of plots 1, 3,4, 5 and 6 on Works Close, Luzira, which they had mortgaged to Stanbic Bank (U) Ltd as security for a loan advanced in 2017.

“We have since paid off the entire loan, but the bank has refused to release our titles,” reads the letter. “Initially, the bank’s lawyer (one Andrew Munanura) claimed it sold the property by public auction advertised in the Monitor to take place on 6th December 2019 yet there was in fact no auction.”

According to the director, the plots were grabbed through an insider dealing scheme between the bank and its employees using a front called Myriad Investment Club Ltd. Myriad is said to be owned by Kenneth Kitungulu, Executive and Head Global Markets-Stanbic; Florence Kawees, Global Business Manager-Stanbic Bank; Allan Muhinda, Interest Rates Dealer-Stanbic Bank; Daisy Nitwe, Corporate Treasurer (Sales Dealer)-Stanbic Bank; Emmanuel Luteba, Head Products and Analytics–Stanbic; Maureen Kembabazi Katwebaze, who works with Stanbic IBTC Bank, Nigeria; and Thaib Lubega, a former Treasury Manager-Stanbic Bank Uganda.

The director’s letter indicates Kitungulu and Nitwe signed the sale agreement as the buyer’s directors. “The sale agreement was drawn by the bank’s legal department, colleagues of the buyers, directors, shareholders. It bears the stamp of head PBB Credit Stanbic and Signature of Denis Lugoloobi, senior manager-Credit evaluation signing for the bank,” the letter reads further.

“Stanbic bank conspired with its employees to grab our properties at a low price of Shs1bn. Stanbic even gave them opportunity and the time to obtain credit from dfcu to finance the purchase. The sale agreement indicates a public auction and the sale was concluded on 25h March 2020 during the COVID-19 lockdown,” Odongo explains.

Article 39 (2) and (3) of the Mortgage Act stipulates that sale of mortgaged property by a bank to its employees is a crime punishable by imprisonment of not less than 24 months.

Stanbic now says it will cooperate with authorities in investigating the matter. “As a responsible corporate citizen, Stanbic Uganda is committed to due process. Accordingly, Stanbic Uganda will carefully consider if the allegation of inappropriate involvement of its employees in the foreclosure process has any merit,” reads the bank’s statement. “In addition, Stanbic Uganda will fully co-operate with the authorities to bring this matter to a close.”

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