The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Cooperators under their apex body, Uganda Cooperative Alliance are looking forward to the report by the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) to guide their next course of action on the defunct 1964 Cooperative Bank.
Led by Ivan Asiimwe, the General Secretary Uganda Cooperative Alliance, the shareholders are mulling strategies to recover assets, discover the liabilities, member’s shares and property that was liquidated. The bank’s assets and liabilities were acquired by Cooperative Bank Limited, which was registered under the Company Act in 1997.
Shareholders of the new bank included John Muwanga (then a civil servant in Ministry of Finance), Joseph Nsereko (a management consultant) and three farmers- Sancho M. Rugatsimbana, William Kalema and Anthony Sekweyama. The seven individuals were allotted shares when the Registrar of Companies registered the second bank on November 20, 1997.
Asiimwe is hopeful that COSASE will resolve their issues, which include compelling Bank of Uganda to produce the liquidation report and other vital documents that were seized when the 1997 bank was closed.
During the probe, Hannington Wasswa, the Director Commercial Banks in Bank of Uganda informed the Committee that the Cooperative Bank that was closed by Bank of Uganda had USAID, Cooperative Movement and individuals as its shareholders.
This new bank didn’t however allot shares to 46 primary cooperative societies and 35 unions. Cooperators informed the committee that by 1997, Uganda Cooperative Alliance (UCA) had shares worth Shillings 2.53 Billion in trust, while Banyankole Kweterana Cooperative Union had shares worth Shillings 220 million among other societies.
The other members included Buggaga Maanyi Cooperative Society Ltd, Luwero Triangle Cooperative Society Ltd, Arua Transport Cooperative Society Ltd, Engangainos Cooperative Society Ltd, Lango Cooperative Union Ltd, Bugisu Cooperative Union, Busoga Growers Cooperative Union Ltd, and Uganda Enguli Cooperative Union Ltd.
Asiimwe says at the moment cooperators can’t rule out taking legal action against government officials or offices involved in the incorporation of the 1997 Cooperative Bank, which acquired the assets and liabilities of their bank. These include the Bank of Uganda, Uganda Registration Bureau (URSB), the Registrar of Companies in particular, and Registrar of cooperatives.
He says that the seven shareholders of the 1997 bank may also be sued. This stems from years of frustration and failures to get information regarding the old bank and whether or not it was closed in 1999.
The cooperators petitioned Parliament twice (in 1999 and 2016), the Inspectorate of Government and Bank of Uganda in vain.
The Then Bank of Uganda Governor, the late Charles Nyonyintono Kikonyogo wrote to the former Speaker of Parliament, the late Francis Ayume on August 16, 1999 that he met the shareholder’s representatives twice and confirmed that the bank was insolvent at the time of its closure.
Kikonyogo said it was unviable to reconsider the closure of the bank. He was responding to a Parliament resolution recalling Bank of Uganda to reconsider the decision of selling Cooperative Bank with a view to have it reconstituted in the interest of depositors.
During this Ping-Pong, the cooperators consistently asked that Bank of Uganda provides the shareholders the liquidation report. To date, the 1964 cooperators have not seen the liquidation report and thereby perceive COSASE as a “savior” to answer issues they have pursued for the last twenty years.
Asiimwe says the cooperators are also brainstorming on the future of their bank in light of the impending COSASE report.
The Minister of State for Co-operatives, Fredrick Gume Ngobi, says he has followed the proceedings of COSASE closely, particularly on the issues regarding the two cooperative banks.
He declined to make any comments regarding the certificate of registration and shareholders of the 1964 Cooperative Bank.
He referred our reporter to the Commissioner Cooperatives, Joseph William Kitandwe, to provide copies of the Certificate of registration and shareholders of the 1964 Cooperative Bank. Kitandwe, who is also the Registrar for Cooperatives declined to comment on what actions were taken by his office to deter the registration of the second Cooperative Bank in 1997.
He however, says that since his office was not responsible for the duplication of names, COSASE and the cooperators must find out who is responsible for the mess and how best to resolve the matter that has dragged on for close to 20 years.
Ngobi and Kitandwe also didn’t disclose whether or not they engaged with COSASE on the matter. COSASE received submissions from Bank of Uganda and Uganda Registration Bureau (URSB) on how two banks could be registered in the same names, and which one was closed.
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