COSASE Ejects Central Bank Officials for Lack of Supporting Documents

  • Posted on: 11 February 2019
  • By: sanyu-fm-news

The Committee on Commissions, Statutory Authorities and State Enterprises-COSASE has kicked out Bank of Uganda officials led by the Governor, Emmanuel Tumusiime Mutebile for appearing without supporting documents to their presentation.

 
The officials had appeared on Monday to respond to accusations by the shareholders and directors of several commercial banks that were closed by the Central bank between 1993 and 2016.

Tumubweine Twinemanzi, the BoU Executive Director of Supervision started off by disputing allegations made by the shareholders of the defunct Global Trust Bank-GTB, regarding the manner in which the bank was shutdown. 

 
GTB was closed in 2014 due to persistent losses amounting to Shillings 60 billion. BOU argued that the losses posed a risk to depositor's funds and interests. 
 

However, while appearing before COSASE in December 2018, the shareholders of GTB insisted that their business model was not designed for quick profits. 

They also claimed that they had responded to all demands by the Central Bank to inject additional capital into the business including US$ 10 million between January 2013 and May 2014.
 

COSASE Chairperson, Abdu Katuntu tasked the BOU officials to respond to the claims by GTB. He wondered why BOU didn't give GTB time to prosper since the prevailing situation wasn't unique to the bank.
 
 

In his response, Twinemanzi argued that the GTB losses were increasing every quarter. He cited a letter written by the shareholders in which, they were complaining of repeated capital calls.
 

When tasked to produce the letter, Tumubweine said he had submitted it to the committee, a claim that was disputed by Katuntu.
 
 
He noted that the whole presentation was flawed since it wasn't backed with any evidence from BoU. This prompted several MPs to point out more weaknesses in the presentation forcing Katuntu to adjourn the meeting to Tuesday.

 
Katuntu asked the Central Bank to present the reports and financial statements of Greenland Bank, International Credit Bank (ICB) and Cooperative Bank as at the end of 2016.
 

He also asked them to prove whether or not Nile River Acquisition Company that purchased the loan portfolios of the three banks still exists.