Auditor General John Muwanga last week told Bank of Uganda Deputy Governor Dr Louis Kasekende that his office was not in position to honour a request to carry out a fresh audit on the Shs478 billion which the Central Bank injected in the now defunct Crane Bank.
On March 11, 2019, Kasekende wrote to Muwanga requesting him to undertake a verification of documents that had not been availed during an earlier audit.
“Regrettably, I am unable to undertake the verification since the report has been issued to the Rt. Hon. Speaker of Parliament on February 8, 2018. Any additional verifications on the already issued report can only be undertaken with the authority of Parliament,” the AG told Kasekende in a letter dated April 4, 2019.
“We will keep the documents and wait for further communication from Cosase [Committee on Commissions, Statutory Authorities and State Enterprises].”
Following the development, one of the officials at the Office of the Auditor General said Kasekende just wanted to hoodwink them into carrying out the audit.
“They wanted to hoodwink us that the verification is honest yet it’s a trick…They are stuck because they denied Auditor General documents and this is a crime under National Audit Act. Kasekende and his colleagues at BoU are to blame for failing to account for the money that was drawn from taxpayers’ coffers,” the official who preferred to remain anonymous told a local news website.
“I am told the reason why BoU wants verification of Crane Bank cash is for court purposes. They want AG to clear them. Half of Shs478 billion was diverted. Now they are trying to forge accountability. Asking now for verification is to somehow save themselves. It should not be allowed now when Kasekende resisted it despite AG wanted it. In fact direct beneficiaries were largely Justine Bagyenda, Kasekende and Benedict Sekabira.”
In October 2016, BoU took over Crane Bank on grounds of undercapitalization, placed it under receivership. During that time, the Central Bank injected Shs478 billion in the commercial bank’s liquidity process.
Crane Bank was later in January 2017 sold off to dfcu Bank at Shs200 billion which was to be paid in installments.
In a February 8, 2019 confidential audit report to Speaker Rebecca Kadaga, Muwanga revealed that Shs272.6 billion of the Shs478 billion that was meant for Crane Bank liquidity support, could not be traced anywhere.
AG found that BoU officials approved and remitted $53.16 million (more than Shs195 billion) to Crane Bank by Telegraphic Transfers (TTs).
The money was allegedly requested by undisclosed Crane Bank customers and was later released through the bank’s Nostro Account 3582025085001 after BoU officials sent instructions to Citi Bank in New York.
In defence, Kasekende said Crane Bank upgraded the banking software from the Bank Master Core system to T24 system, bringing out the “mismatch” in information and that linking the two systems by dfcu Bank was a tedious process that required more time.