MPs query Co-operative Bank asset transfer agreement

Kampala, Uganda | THE INDEPENDENT | The authenticity of agreements transferring assets of the 1964 Cooperative Bank to that incorporated in 1997 under the Company’s Act has been questioned.

For the past few weeks, the commissions committee of parliament has been probing how the Cooperative Bank in 1997 was incorporated replacing and taking over assets and liabilities of a previous Bank, incorporated under the Cooperative Societies Act in 1964, under the same name.

Central Bank Legal Counsel Margaret Kasule Kaggwa Wednesday told the committee that the Cooperative Bank was first registered in 1964 as a cooperative society with a membership of 16 unions and 77 primary societies.

It was re-licensed in 1970 as a financial institution operating in accordance with the Societies’ Act of 1970 and the Banking Act of 1969. Kaggwa said that the Bank started off as a credit institution and was licensed as a fully-fledged commercial bank in 1974.

But she noted that another company called Cooperative Bank Limited was incorporated in 1997.

The committee learnt that the government in collaboration with USAID then incorporated a new bank to give cooperative societies majority shares and allow non-cooperative members or individuals to invest in the bank to raise capital.

Kasule tabled an agreement before the committee in regard to the transfer of shares or assets to the new bank dated January 1, 1998. However, COSASE Vice Chairperson, Anita Among questioned the date of the agreement saying that January 1, is a public holiday and has never been a working day.

Charles Owor, the former Banking Secretary of the original Cooperative Bank Limited said that the date was a typing error.

Bukoto East MP Florence Namayanja asked Owor to provide the actual day and date in which the agreement was signed since January 1, was a typing error in his opinion. But Owor said that he was not in position to provide the specific date given that so many years have passed.

His argument was rejected by Buhweju MP Francis Mwijukye. The sitting chairperson ruled that the committee would pronounce its self in the report to parliament next week.

Mbarara Municipality MP Michael Tusiime wondered why the persons in charge never utilized all the available processes to correct errors in documents.

Owor appealed to the committee to consider the documents saying that it was prepared by their external lawyer Dr Joseph Byamugisha.