You’re not above the law, MPs tell Bank of Uganda

Attempts by Bank of Uganda to circumvent a Parliamentary probe into the closure of commercial banks collapsed after MPs on Parliament’s committee on Commissions, Statutory Authorities and State Enterprises (COSASE) disregarded a letter from the Central bank’s legal department warning against the investigation.

Committee chairman Abdu Katuntu told the committee that he had received a letter the Bank of Uganda’s acting legal officer Titus Mulindwa, telling the MPs that they lack the jurisdiction to investigate the Central bank because it is an independent entity.

But Katuntu disregarded BOU’s legal opinion because it is unprecedented yet still, Parliament has the mandate to investigate all government agencies.

“The legal opinion, I don’t know its basis or origin, first, we didn’t seek it, why, because this institution doesn’t seek legal opinion from the Bank that is first of all, a big mistake,” Katuntu said.

And as the hearing got underway, the Central bank admitted that some of commercial banks like Teefe Trust Bank Ltd was closed without an inventory.

Deputy governor Louis Kasekende told the MPs that at the time of its closure in 1993, Bank of Uganda was following the old law which was enacted in 1969 which had substantive provisions on reports that the liquidator was required to compile.

“At the time of the closure, the law was the 1969 law and the nature if documents required didn’t include the inventory so we don’t have the inventory. We have provided information regarding the assets and liabilities and if you notice there is communication on basis of financial position and conclusion was the bank was insolvent and that was the basis for closure,” Kasekende said.

Katuntu however disagreed, arguing that even in the absence of a direct provision, it was incumbent upon the Central bank to keep record of the transaction.

“Did the law say don’t make an inventory? You can’t move into an institution and take over without knowing what you are taking over,” Katuntu said.

“If you are going to take over an institution and your case is that the law didn’t require me to state what you are taking over, really prudently and professionally, you should be able to do that. I mean anybody doing, should be able to list what he is taking over because at some point, your accountability will be what you took over,” the Bugweri MP added.

The COSASE investigation is a result of a special audit report by the Auditor General that is looking into closure of the seven commercial banks namely, Teefe Trust Bank Ltd  (1993), International Credit Bank Ltd (1998), Greenland Bank (1999), Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and Crane Bank Ltd (2016).

BOU officials also failed to avail the committee with the loan schedules to the chagrin of the MPs.

Katuntu gave the Central bank upto Thursday to present documents relating to the closure and sale of Teefe Trust Bank Ltd.