The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Parliament’s committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has recommended that Central Bank officials involved in the sale of loan portfolios for five defunct banks be held personally liable.
The banks include International Credit Bank, Greenland Bank, Cooperative Bank, Global Trust Bank and National Bank of Commerce.
COSASE pins former Director Commercial Banking, Benedict Sekabira and former Executive Director Justine Bagyenda as people who had conflict of interest in the transaction.
The committee also recommends that the Inspector General of Police, Martin Okoth Ochola immediately seizes all land titles in possession of city lawyer Kakembo Katende and a loan collection company for the five defunct banks.
The committee report was on Thursday presented to Parliament by Bugweri County MP Abdu Katuntu.
During its earlier investigations, COSASE learnt that the Central Bank tasked lawyer Kakembo Katende of Kirkland to get a company that can buy loans for the defunct banks. Nile River Acquisition Company was then contracted to collect loan debts from the customers of the defunct banks.
Nile River Acquisition later contracted SIL Investments to carry out the mandate and they have been collecting money from the different debtors since 2008.
However, Katuntu said that the committee failed to locate Nile River Acquisition Company. He added that the debt collection mandate by SIL Investments is illegal and so is their possession of customer’s property documents.
Katuntu further said that Sekabira, currently Director Financial Markets Development at BoU to be held liable for conflict of interest.
Katuntu also reported to parliament actions by the former Executive Director Bank Supervision Justine Bagyenda in the transaction process.
Katuntu further recommended to parliament that the fraudulent business activities being conducted by M/s SIL Investments on behalf of a non-existent Nile River Acquisition should immediately cease and the IGP is required to immediately, on adoption of the report, seize all the land titles in the possession of lawyer Kakembo Katende and SIL Investments arising from their management of the loan portfolio sold to Nile River Company by Bank of Uganda.
COSASE says that SIL Investments and lawyer Kakembo Katende should render an account to the public trustee of all monies received from the time Nile River Acquisition Company ceased to exist. Katuntu says that the agency of SIL Investments Limited cannot legally exist upon dissolution of the Principal Nile River Acquisition Company.
He recommends that Uganda Revenue Authority (URA) takes interest in the tax activities of Nile River Acquisition Company and its agents, M/s JN Kirkland and M/s SIL Investments Limited, to recover unpaid tax.
COSASE’s report to parliament observes that in the case of ICB, Greenland Bank and Cooperative Bank, the total loan portfolio sold at 135 billion shillings included secured loans of 34.5 billion shillings which had valid legal or equitable mortgage on the real property and were supported with legal documentation.
However, these were sold, to M/s Nile River Acquisition Company at 93 percent discount.
COSASE further notes that the negotiation minutes detailing the evaluation of alternatives and assumptions of the sale of Global Trust Bank (GTB) and National Bank of Commerce (NBC) assets were not provided and as such the Auditor General could not determine the basis for selling assets at such a discount.
In his audit report on the closure and sale of seven commercial banks, Auditor General John Muwanga observed that the Central Bank sold assets worth 164 billion shillings of the five defunct banks at discounted rates yielding only 32 billion shillings.
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