Probe into Cooperative bank closure takes twist

Kampala, Uganda | THE INDEPENDENT | The probe into the closure of Cooperative Bank took a twist after the committee investigating the irregular sale of commercial banks resolved to summon the Auditor General John Muwanga to clarify on allegations that there were two cooperative banks.

This was after shareholders of Cooperative Bank Limited set up under the Cooperative Societies Act argued that the Cooperative Bank which was closed was operating under the Company’s Act, yet the Central Bank went ahead to seize their properties.

Ivan Asiimwe, a former shareholder of Cooperative Bank Limited informed the committee that in 1964 different cooperative unions established the Cooperative Bank under the Cooperative Societies Act and that a second Cooperative Bank was incorporated in 1997 under the Company’s Act.

He says that the shareholders of the first bank were shocked to learn of their bank having new shareholders alleging that the current Auditor General John Muwanga and other six other people were allowed to register a new Cooperative Bank.

He demanded that COSASE compels the government to clarify how they allowed individuals to register a company without a resolution of shareholders.

Asiimwe said that by the time the Bank of Uganda took over their Bank in 1999, their institution had 24 branches and six agencies. He adds that there are many questions that remain unanswered in regard to the manner in which their Bank was closed because the shareholders, who at the time were in unions and cooperatives weren’t involved in the day to day business of their bank, and therefore don’t know what led to the closure of their Bank.

He said the decision to close Cooperative Bank led to the loss of business in form of physical infrastructure, loss of shares and that the former shareholders don’t know what happened to their buildings in Masaka, Jinja and Mbale.

“…cause BoU to produce all documents relating to the transition of the society into the limited company for cooperators to understand. Help the cooperatives obtain the liquidation report of the Bank from BoU because cooperators have consistently requested for it to no availů,” Asiimwe tasked the Abdul Katuntu led committee.

He also appealed for assistance to recover their investment and properties worth trillions of Shillings that were lost during the liquidation process.

Katuntu said that the Auditor General John Muwanga through his Director Parliamentary Liaison Samuel Musana said that he had signed the memorandum on behalf of the Accountant General.

Katuntu postponed the meeting with the cooperators to Thursday summoning all people mentioned including Auditor General John Muwanga, Fred Nyakana, Anthony Ssekweyama, Joseph Nsereko, William Kalema, Samuel Magoona, Joseph Nsereko and Anthony Rugakasimbana.

The probe was triggered by a 2017 forensic audit report by Auditor General John Muwanga that pointed out irregular operations in the Central Bank and the controversial closure and sale of the commercial banks since 1993.

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