Bank of Uganda blew away a total of Shs478 billion in the few months it was in charge of Crane bank which had been put under receivership. Surprisingly, the same bank needed only Shs157 billion recapitalization to stay afloat.
In October 2016, BoU took over Crane Bank on grounds of undercapitalization, placed it under receivership before selling the commercial bank to Dfcu in January 2017.
However, in a February 8 2019 confidential audit report to the Speaker of Parliament Rebecca Kadaga, the Auditor General (AG) John Muwanga revealed that Shs272.6 billion of the Shs478 billion that was meant for Crane Bank liquidity support, cannot not be traced anywhere.
The report that Watchdog Uganda website has seen says the 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.
“I traced the accounts in the CBL in the TT requests to CBL Nostro account statement and confirmed that the amounts in the requests tallied with the transfers from the Nostro Account. However, I was not able to confirm the final recipients of the respective transfers from the CBL Nostro account as the account didn’t indicate the beneficiary account names, account numbers and beneficiary bank,” the AG report states in part.
Mr. Muwanga also disclosed that an additional Shs77.5 billion that BoU officials claim they transferred to 46 Crane Bank branches across the country cannot be detected.
“Crane Bank annual accounts for the period starting January 1, 2016 to January 25, 2017 also could not be traced.”
Meanwhile, while responding to the AG’s report, BoU Deputy Governor Louis 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 has been a tedious process that might require more time.
Currently, Parliament’s Committee on Commissions Statutory Authorities and State Enterprises (Cosase) is in its final phase of probing top Central Bank officials over their role in the alleged irregular closure and sale of seven commercial banks between 1993 and 2017 as raised by the AG 2017 forensic audit report.