Greenland Bank Seeks Over Shs 100Bn in Compensation for ‘Fraudulent’ Liquidation

Bank of Uganda headquarters in Kampala.

Shareholders of the defunct Greenland Bank have accused the Central Bank of fraud in the handling of securities for loans of the defunct bank, and now demands over Shs 100bn in compensation for the loss caused.

Led by Ahmed Nsubuga and Haruna Sebagala, the bank’s shareholders on Tuesday met MPs on the committee on Commissions, Statutory Authorities and State Enterprises (COSASE) over the closure of the bank twenty years ago.

Nsubuga tendered in a claim of Shs 171bn as a residual claim following the liquidation of assets and properties of the bank which the shareholders say were fraudulently disposed of by the Bank of Uganda.

The group laid out a detailed report and schedule of assets and liabilities that were purportedly disposed of without maintaining any records or accountability of assets.

Among these was the sale of Greenland Bank Tanzania which they valued at Shs 38bn, the sale of shares in Westmont valued at USD 10.45m, wheat grain valued at USD 11m among other shares in various businesses.

Nsubuga told MPs that there were no account orders for sale of properties and the liquidation process was characterized by outright undervaluation of assets, use of unlicensed valuers and court bailiffs, creation of fake customer accounts and impunity by disregard of court orders following several claims filed against the Central Bank.

“The Bank was closed 20 years and to date, there is no single report to this position and for that matter, we were pushed in disarray, fear was exerted on us and that is how we have been kept quiet. And this is worrying to the young generation who would like to invest in business,” Nsubuga said.

“We believe there was suspected fraud in the way how bank assets were handled by the liquidators – Bank of Uganda; the shareholders have been alarmed by the incredible discount of 93 percent which is unheard of.”

Nsubuga quoted the Auditor General’s forensic audit report into BOU in which he noted that there was no reliable and authentic asset movement schedule between April 1999 and today.

He has called for proper accountability of the entire period that Greenland Bank has been under liquidation.

On Monday, COSASE started its interaction with the various shareholders of the seven defunct banks which were closed by the Central Bank, beginning with those from National Bank of Commerce.

Since November 2018, COSASE headed by Bugweri County MP, Abdu Katuntu has been probing Bank of Uganda following the Special Audit Report by the Auditor General on the closure of the seven commercial banks.

The committee has since been interacting with different stakeholders including the officials from BOU. On Monday, the committee began its final leg of week-long hearings that will interview shareholders of the affected banks.

The defunct commercial banks include; Teefe Bank (1993), International Credit Bank Ltd (1998), Greenland Bank (1999), The Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and Crane Bank Ltd (CBL).
Today, the committe is meeting shareholders of National Bank of Commerce, Teefe Bank, Nile River and SIL Investments Limited.

Nile River is the company that bought the assets and liabilities of International Credit Bank Ltd, the Co-operative Bank and Greenland Bank. The loan portfolio of the 3 banks was over 130bn but BoU sold them at Shs8bn which is 93% discount.

Nile River later handed over the 3 banks to SIL Investments Limited.

The former Prime Minister, John Patrick Amama Mbabazi, Prof George Wilson Kanyeihamba, businessman Amos Nzeyi and the former NBC Board Chairman, Mathew Rukikaire among others have appeared as stakeholders of National Bank of Commerce.

The National Bank of Commerce was closed by Bank of Uganda in September, 2012 for having been undercapitalised and it was later sold to Crane Bank Limited.

In his opening remarks, the outgoing Chairman of COSASE, Abdu Katuntu noted that by February 22, the committee will have finished its report and hand it over to Parliament.

He said that the committee will interface with stakeholders for only one week and will be enough for them to file a required report to the House.

Speaker of Parliament, Rebecca Kadaga recently extended the tenure of the leadership of COSASE to allow them time finalize with the probe.

Kadaga’s decision followed designation of new members to all the standing committees among which is COSASE.

On COSASE, Katuntu will be replaced with Mubarak Munyagwa as Chairperson.

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