BOU Fails to Defend Claims by Defunct Banks Shareholders on Irregular Closure

Officials from Bank of Uganda appearing before COSASE previously.

Officials from Bank of Uganda (BOU) have Monday been dismissed from the proceedings of the Parliamentary committee on Commissions, Statutory Authorities and State Enterprises (COSASE) after they failed to defend the claims of irregular closure raised by shareholders of defunct banks.

The Bank officials had appeared before the committee in an exit meeting and were required to respond to the allegations that were raised by shareholders and directors of the closed seven defunct banks. They were led by the Governor, Emmanuel Tumusiime Mutebile and the Deputy Governor, Louis Kasekende.

Last week, the shareholders of all the defunct banks accused BOU of unfairly and illegally closing down their banks.

The shareholders of Global Trust Bank accused BOU of being inconsiderate for closing their bank without prior warning, despite having time and again recapitalized their bank whenever need arose.

Similarly, the Directors from the National Bank of Commerce (NBC) led by Mathew Rukikaire and the former Prime Minister, Amama Mbabazi who accused BOU of closing their bank with only a liquidity issue of Shs 300m yet they had cleared a deficit of Shs 7bn within four days.

Officials of Crane Bank led by the Board Chairman, Joseph Biribwona and his deputy, Sudhir Ruparelia accused of BOU of closing their bank on claims of being under capitalized despite taking all the necessary steps to resolve the liquidity issues.

However, on appearing before the committee, the Bank Executive Director, Bank Supervision, Twinemanzi Tumubweine failed to offer any substantive response to the concerns that were raised by the affected parties.

Twinemanzi was accused by committee members of simply presenting narrations before the committee without providing any relevant backing documents.

“I have gone through your response but in most cases, we have narration with no document to dispute the allegations; you make a lot of references to the documents which you are not attaching,” noted the Committee Chairperson, Abdul Katuntu.

Twinemanzi responded that the documents backing his submissions were part of the heavy folders that the Bank had submitted during the commencement of the probe.

This kept legislators wondering how they could trace the documents in the heavy files yet the own of the files had failed to locate them.

This prompted Katuntu to adjourn the meeting to Tuesday ordering BOU officials to return with all relevant attachments in case they dispute the submissions that were made by the shareholders of the defunct banks.

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