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Stanbic Bank Accused of Irregular Sale of Client's Property to its Own Top Bosses

In a letter dated 23rd September 2020 addressed to Special Investigations Division, Criminal Investigations Directorate, Beatrice Odongo, a Director at Macdowel Ltd says that they mortgaged their properties at plots 1, 3,4, 5 and 6 -Works Close, Luzira to Stanbic Bank (U) Ltd as security for a loan advanced in 2017. The property in question is MaCdowel Apartments that are located in Luzira
posted onSeptember 28, 2020
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Stanbic Bank (U) Ltd, Uganda’s biggest bank by assets and market share is on the spot for allegedly selling a client's mortgaged properties to the bank’s top employees.

In a letter dated 23rd September 2020 addressed to Special Investigations Division, Criminal Investigations Directorate, Beatrice Odongo, a Director at Macdowel Ltd says that they mortgaged their properties at plots 1, 3,4, 5 and 6 -Works Close, Luzira to Stanbic Bank (U) Ltd as security for a loan advanced in 2017. The property in question is MaCdowel Apartments that are located in Luzira.

“We have since paid off the entire loan, but the bank has refused to release our titles,” the letter seen by the Kampala Post reads in part.

The letter is also copied to the Governor Bank of Uganda and the Head of State Anti-Corruption Unit.

“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,” Odongo notes.

She argues in the letter that their properties were actually grabbed through an insider dealing scheme between the bank and its employees using a front called Myriad Investment Club Ltd.

The letter claims that the shareholders of Myraid and their job designations are; Kenneth Kitungulu-Executive and Head Global Markets-Stanbic, Florence Kaweesa-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-Works with Stanbic IBTC Bank, Nigeria and Thaib Lubega-formerly Treasury Manager-Stanbic Bank Uganda.

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The accused executives and directors of Myriad Investments (clockwise from top): Kenneth Kitungulu, Executive and Head, Global Markets; Maureen Kembabazi Katwebaze, Head,Retail & Digital Sales,Global Markets; Daisy Nitwe, Corporate & Treasury Sales Dealer, Emmanuel Rukeeba, Head Products and Analytics; Allan Muhinda & Interest Rates Dealer and Thaib Lubega, Treasury Manager, Uganda Development Bank. Courtesy photos

The letter adds that Kenneth Kitungulu and Daisy 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 in the letter to the authorities.

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

“We are reliably informed that this practice has been ongoing for a long time within the banking industry,” the letter says, adding: “The purpose of this letter is to request your office to investigate this complaint and charge the culprits.”

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