Members of Parliament have opposed a move by the new Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) chairman, Hon Mubarak Munyagwa to open fresh inquiries into the closure of 7 defunct banks by Bank of Uganda (BoU).
According to reports by Daily Monitor, a local independent daily, on Tuesday, 28th May 2019, Munyagwa, also the Kawempe South MP, named a select sub-committee to carry out the inquiry. The five-member committee is headed by his vice chairperson, Mr Ibrahim Kasozi of Makindye East Constituency.
COSASE is also reported to have met with BOU officials led by the deputy Governor, Dr Louis Kasekende, and tasked them to respond to outstanding Auditor General’s queries, a move that some of the MPs have interpreted to mean, re-opening the probe that was concluded by then COSASE chairman and Bugweri County MP Abdu Katuntu.
Katuntu in his February 21 report found BoU’s closure of 7 defunct banks to be severally in breach of the Financial Institutions Act 2004, under which the same banks were closed. The Katuntu committee among other recommendations asked that the named errant BoU officials be held criminally liable and also proposed several reforms in the governance of the central bank.
The committee also recommended that the shareholders of the closed banks be compensated for the losses because BoU officials did not follow the due process.
UGX270 billion unaccounted for
During the course of the probe, COSASE on 20th December 2018 ordered a special audit by the Auditor General probe to among others, confirm the receipt and expenditure of the liquidity support and other intervention costs amounting to UGX478.8bn injected into Crane Bank by BoU between 20th October 2016 and 25th January 2017.
The AG, however reported that out of the UGX478.8 billion, he could not trace the final destination of USD53.1m sent by Telegraphic Transfer from BoU’s Citi Bank Account and UGX77.5bn in cash from CBL currency centres to CBL’s 46 branches, altogether an equivalent of UGX270 billion.
The AG was also not able to establish whether the Statutory Manager of Crane Bank prepared financial statements in line with Section 90(4) of the FIA 2004, ascertain the liquidity position of CBL during statutory management period since the audited CBL annual report and financial statements for the period starting 1st January 2016 to 25th January 2017 were not submitted to BoU by KPMG, the external auditors.
Bank of Uganda, however in March, nearly a month after the COSASE probe had closed, attempted to submit the said accountability to the Auditor General for verification, but the AG declined saying the probe had closed and the report issued to the Rt. Hon Speaker of Parliament on 8th February 2018.”
MPs believe the May 28th move by Munyagwa to task Dr Kasekende to bring documents showing accountability for the Shs478b injected in Crane Bank, is solely designed to let BoU off the hook.
Nwoya County MP Simon Oyet, told Daily Monitor that the move was against the rules of Parliament for COSASE to restart an investigation into matters that were concluded by the House without seeking new terms of reference from the Speaker.
“COSASE should focus their efforts in making sure that the recommendations of the committee are taken up by the responsible authorities in government. So, to carry out fresh investigations, they must seek permission from the Speaker,” he is quoted by Daily Monitor as saying.
Budadiri West MP Nandala Mafabi said there is need for the current chairperson to write to the Speaker specifying what exactly they want to tackle afresh.
Bukomansimbi South MP Deogratius Kiyingi told Daily Monitor that Munyagwa’s move was equivalent to “moving in circles.”
As Parliament, we concluded that matter and we are waiting for a report on the implementation of the recommendations by the Executive.”
Ajuri County MP Hamson Obua, also told Daily Monitor that such a process, if allowed by the Speaker, would be a “duplication and wastage” of parliament’s resources and time.
Expedited COSASE recommendations
In a recent exclusive interview with CEO East Africa Magazine, the Speaker of Parliament, Rt Hon. Rebecca Kadaga said that parliament was waiting on the executive to take action on the recommendations of the Katuntu report.
She also implored the executive arm of government to expedite bills to reform several aspects governing the banking industry and the running of Bank of Uganda, as recommended by COSASE.
Kadaga, also expressed dissatisfaction and frustration at the executive’s speed in responding to Parliament’s recommendations especially in dealing with accountability issues.