By Max Patrick Ocaido
Bank of Uganda (BoU) has been pinned for ‘unlawfully’ selling National Bank of Commerce (NCB) where former Prime Minister Amama Mbabazi was one of its top shareholders.
The Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) today (Monday) resumed the probe on BoU over closure of 7 defunct banks. The committee interacted with shareholders of one of the defunct banks- National Bank of Commerce (NBC)who demanded for the re-opening of the Bank because “it was illegally sold by the Central Bank.” Among the shareholders are Amama Mbabazi, tycoon Amos Nzeyi and Prime Minister Rukutana Rugunda.
While interacting with the committee, Mathew Rukikaire, the current chairperson Board of Directors, NBC said that the manner in which the Central Bank closed NBC was in total violation of the law and it was neither transparent nor fair.
On September 27, 2012, BoU Deputy Governor, Louis Kasekende with immediate effect took over the management of NBC and sold it to Crane Bank (now defunct) because “Bank of Uganda has determined that the continuation of NBC’s activities is detrimental to the interests of its depositors.”
However, NCB shareholders insist that the reasons given by the Central Bank for closure for their Bank contradicts the reigning status of the Bank at the time of its closure.
Rukikaire said that at the time of closure, NCB was undergoing a huge transformation where $1.7m was injected into state of the art headquarters, $1.2m for acquiring new software system, acquired new ATM, and that the Bank was fully operational.
“We were then ordered by court to raise Shs7bn as required by Bank of Uganda and indeed, during the AGM, we agree to comply with court order and raise money within 4days. New board was elected and approved by Bank of Uganda. However, Ms Bagyenda [former BoU director in charge of Supervision] directed that Shs7Bn be invested in Treasury bonds. This frustrated new board’s effort to effectively use capital to generate income for NBC,” Rukikaire said.
He added, “Bank of Uganda claimed that the capital of the Bank was being eroded and subsequently, penalty of Shs2m was slapped on us by Bagyenda Bagyenda for non-compliance with Bank of Uganda’s directives. It is clear that senior staff of BOU were determined to fail NBC and kick it out because even when we complied with their directives, they still closed us less than 3 months later.”
Rukikaire further accused BoU of contradicting with its own NBC Monitoring report of September 11th 2012 that showed that the Bank was in a healthy state.
“This drastic action also contradicted NBC Monitoring report that was issued by BoU 15days before closure which showed that NBC had total assets of Shs21bn,” he said.
Despite the fact that BoU claimed to have sold NBC’s sale of assets to Crane Bank, the shareholders say they have never known the sale price of their bank.
“The entire loan book of NBC Bank was sold at a discount of 35% and Crane Bank was to keep 65% of the money. Cash and assets of NBC were forcefully removed from our premises with many bank documents thrown around. No cash or asset inventory was performed as required by the Financial Institutions Act, 2014. We believe a lot of physical cash found in a bank remained unaccounted for or was stolen in the process,” Rukikaire said adding, to date, NBC assets including brand new ATMS worth $240,000, furniture worth $700,000, vehicles and others remain unaccounted for.
