The Director of Public Prosecutions (DPP) Jane Frances Abodo has insisted on charging former Bank of Uganda Deputy Governor Dr Louis Kasekende and former Director in charge of supervision Justine Bagyenda for allegedly fleecing assets of defunct commercial banks.
In a meeting held on Friday, the DPP ordered the Director of Criminal Investigations Directorate Grace Akullo to speed up the investigations. She said Kasekende, Bagyenda and colleagues should be summoned if not arrested and record their statements
Ms Abodo further revealed that she recently briefed President Yoweri Museveni over the issue and he gave her green light to prosecute the suspects if there’s evidence.
Dr Kasekende recently wrote to the DPP distancing himself from the alleged dubious sale of over 2,700 land titles which belonged to closed commercial banks.
Kasekende wanted his name cleared from the list of suspects being probed over the matter.
In a letter dated August 10,Kasekende through his lawyers Orima and Company Advocates argued that the sale of loan portfolio took place in 2007, a year after to his resignation from the Central Bank in May 2006.
“Our client resigned from his position at BoU deputy governor in May 2006, which is a whole year before the transaction took place and it is our humble prayer that his name is expunged from the file,” the letter reads in parts.
Kasekende’s lawyers also noted that their client was an employee of the African Development Bank at the time the transaction took place.
The economist returned to the Central Bank in november 2009 and worked there until his contract expired on January 14, 2020.
The lawyers say Kasekende has never been involved with the said Nile River Acquisition Company Limited, SIL Investment Ltd or any other company or individual regarding the transaction.
On the other hand, the central bank’s Director for Financial Markets Development Coordination (FMDC) Benedict Sekabira early this month snubbed police summons.
Sekabira was supposed to appear before CID in Kibuli but he never showed up. He is being accused with Bagyenda and Kasekende over concealing title deeds of defunct banks, which were illegally sold off by the Central Bank. Sekabira was first summoned on 30 July 2020 so that he can be produced in court over the charges but he refused to show up.
In 2018, Bank of Uganda top officials failed to explain to Cosase how they came to sell loans of three defunct banks at 93 percent discount to Nile River Acquisition Company (NRAC) registered in Mauritius, a tax haven.
David Opio Okello who once served at BoU as Executive Director Supervision and Acting deputy governor could not explain the role of M/S J.N. Kirkland & Associates which was contracted to identify a buyer of loans of Greenland Bank, Cooperative Bank and International Credit Bank.
M/S J.N. Kirkland & Associates would later identify Octavian Advisors, LP which expressed interest to purchase the assets of the three banks at US $.10.0 million from BOU but Following further negotiations with BoU, N4/s Octavian Advisors, LP registered NRAC in order to transact with BoU and finally bought the assets at US $5.2 million (Shs8.89 billion). The assets which included secured loans worth Shs35 billion, unsecured loans, poorly secured loans and unknown loans were sold in a lump sum, thus devaluing secured loans.
The debt portfolio comprised of Secured, Poorly secured, unsecured and unknown loans amounting to Shs135, 054, 430, 888,” Auditor General John Muwanga says in his special audit report of BoU on defunct banks. According to the report, the sale of the loans to NRAC resulted in a variance of about Shs126.2 billion.
Mr. Opio could not explain the rationale for selling assets of the three banks at 93 percent discount. MPs as such directed BoU officials to produce minutes of the meeting that led that decision, list of buyers of the assets from NRAC, the evaluation reports from BoU.
Asked why BoU had to sell loans of the three banks at US $5.2 million and not at US $10 million as early agreed with Octavian Advisors, LP, the holding company of NRAC, Opio could only say that BoU had collected Shs2 billion of the US$10 million before NRAC bought off the loans at a paltry Shs8.89 billion.
He also surprised the MPs when he said that Octovian Advisors LP did a due diligence of the loans and decided to buy at US$5.2 million, which price BoU accepted without even going to the ground to evaluate the assets attached to loans. BoU explained that they did desktop evaluation.
DPP petitioned:
A Ugandan private citizen has this week wrote to the DPP requesting her to prosecute Kasekende Bagyenda and Seka Ora over their roles in the closure of banks and loss of their assets.
Kakuru Sam Brian, a private citizen, sent the petition to the DPP on Monday, detailing offences of abuse of office and causing financial loss,contrary to the Anti-Corruption Act that have been orchestrated by the officials.
In his petition, Kakuru states that the three officials masterminded the mismanagement of properties that were in the names of seven commercial banks that were closed by the central bank between 1992-2016.
“Section 11 of the Anti-Corruption Act of 2009 creates the offence of abuse of office where a person employed by a public body or company in which a government has shares does or directs to be done an act arbitrary tor prejudicial to his employer or any other person in abuse of office,” reads the petition.
“Section 20 of the Anti-Corruption Act provides for the offence of causing financial loss which is committed by any person employed in a public body or company which government has shares or bank and or a public body who in performance of his duties does or omits to do any act knowing or having any reason to believe that his act/omission will cause financial loss to the government or financial institution.”
Background
A special audit report by the Auditor General (AG) revealed weaknesses in the management of the Central Bank and placed blame on the door of the Governor Emmanuel Mutebile and his team for errors in the closure of at least seven commercial banks.
Among banks was 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) (2016).
The audit was sparked off by the interest generated by the closure and sale of Crane Bank owned by businessman Sudhir Ruparelia.
AG John Muwanga would discover BoU did not have guidelines/regulations or policies in place to guide the identification of the purchases of the defunct banks. Neither did the bank have guidelines to determine the procedures to be adopted in the sale/ transfer of assets and liabilities of the defunct banks to the identified purchaser.
The AG found out that in the Purchase of Assets and Assumption of Liabilities (P&A) deal BoU officials signed with Dfcu on January 25, 2017 for the purchase of Crane Bank Limited, the most recent bank to be disposed off, there was not even negotiation minutes leading to the P&A agreement. On top of that BoU did not carry out a valuation of the assets and liabilities of CBL before their sale.
The Crane Bank sale opened a pandora box and a closet of skeletons hiding behind the Grand Bank of Uganda, have come out dancing on streets. The Bank of Uganda image has in the process suffered by its officials have failed to acknowledge and right the wrongs in the Central Bank systems.
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