Kadaga clears COSASE to probe BOU

Kampala, Uganda | THE INDEPENDENT | The Speaker of Parliament, Rebecca Kadaga has directed the Committee on Commissions, Statutory Authorities and State Enterprises – COSASE to conduct proceedings on issues that were not concluded as pertains matters on the closure of seven commercial banks by Bank of Uganda. 

The seven banks that were closed between 1993 and 2016 include Teefe Trust Bank , International Credit Bank,  Cooperative Bank, Greenland Bank, Global Trust Bank Uganda, National Bank of Commerce and Crane Bank Limited.

Kadaga’s directive comes months after she stopped COSASE chairperson Mubarak Munyagwa and the sub-committee he set up to be chaired by Ibrahim Kasozi from completing pending issues relating to queries into BOU on closure of the commercial banks. 

She blocked further inquiry into irregularities at BOU because Munyagwa had not sought clearance from her office and that his move would result in wastage of resources. 

In February this year, the then COSASE chairperson, Abdu Katuntu presented a report on the matter, which among other issues demanded action against culprits, proposed changes in BOU and also noted the inadequate accountability on the shillings 478 billion BOU invested in Crane Bank Limited before it was sold to DFCU Bank at shillings 200 billion in 2016. 

However, in a letter dated 26 July, 2019, Kadaga has written to COSASE chairperson, Munyagwa to consider the appeal of one Tushabe Chris Karobwa who alleges that the Bank of Uganda mismanaged issues of the Cooperative Bank in receivership. 

He also alleges that the committee under Hon. Katuntu partly handled his case but did not complete it.

Karobwa wrote to Kadaga on June 15th, that he has been a victim of BOU fraud and that his “risky contribution in fighting and exposing corruption in  BOU should not simply  be washed away to benefit wrong doers. 

He urged Kadaga to reverse her decision against investigations into BOU because  ‘thieves’ must be punished. The President’s wish to help me has been frustrated by manipulation of questionable legal technicalities by BOU management. 

Karobwa claims that when Cooperative Bank was closed in 1997,  he lost over shillings 3 billion in cash and property worth shillings 1.42 billion and an overdraft of shillings 600 million which he never used but BOU officials forced him to pay under duress.  He adds that he made the payments with the hope of getting his properties released, but all that was in vain. 

“My properties were not released because the BOU officials involved in this exercise were virtuous beneficiaries in the illegal sale of my properties,” says Karobwa.

He now claims that his quest for justice after a struggle of 20 years could be met if Kadaga allows Munyagwa’s committee to complete hearing his appeal and that of others who were affected by the closure of the banks. 

The Katuntu-led committee report into BOU, noted that some customers of the defunct banks petitioned the committee over irregular use of sale of securities, withholding of securities upon clearance of obligations.

The Committee concluded that “the management of securities during liquidation process has not been fully transparent. Indeed, BoU itself is still in possession of certificates of title which they have failed to explain.”

The chairperson of the sub-committee to complete residual issues related to BOU closure of banks, Ibrahim Kasozi says that his team will now  commence work as soon as possible because some of the petitioners like Karobwa have valid complaints, as noted in the COSASE report. 

He says that he has read Karobwa’s appeal and that Kadaga’s letter is indicative of the need to also handle the other petitions and conclude investigations into  liquidation of the closed banks. 

Kasozi is currently  however handling the probe into Departed Asians’ Property Custodian Board with some of the members of the committee set up to conclude the BOU inquiry. 

The MPs on both sub-committees include Kyegegwa Woman MP, Stella Kizza and Kashari South MP, Nathan Itungo. Kasozi is however optimistic that  both probes will work concurrently, under his leadership. 

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