Contradictions as Bank of Uganda defends Teefe Trust Bank closure

Bank of Uganda officials contradicted one another as they defended the 1993 closure of Teefe Trust Bank Ltd.

Governor Emmanuel Tumusiime Mutebile led a team of Bank of Uganda technocrats to appear before Parliament’s committee on Commissions, Statutory Authorities and State Enterprises (COSASE) that is investigating the Central Bank’s irregular closure of commercial banks.

On Tuesday, the committee adjourned to today the hearing after the Central Bank admitted that some of commercial banks like Teefe Trust Bank Ltd was closed without an inventory.

The MPs asked the BOU officials to return with a list of assets that were seized at the time of the closure of Teefe Trust Bank Ltd.

Before the committee on Thursday morning, the Central Bank officials found themselves contradicting the written statements that they submitted to the committee, and at some instances, the officials contracting one another.

For instance, while in the written statement Bank of Uganda claimed to have closed Teefe Trust Bank Ltd in February 1993 under the 1969 Banking Act, their testimonies proved that the financial institution was closed in November 1993 under a different law.

This was after Mbarara Municipality MP Michael Tusiime alerted the committee that at the time, a new law, Financial Institutions Statute had been enacted on May 16, 1993.

When the contradictions became too many, Rubaga North MP Moses Kasibante proposed that the BOU officials be put on oath while Aruu MP Odonga Otto suggested that the Central bank’s legal officer Margaret Kaggwa Kasule be handed over to the police detectives for underlooking the committee.

Committee chairman Abdu Katuntu however called for patience as MPs once again put the BOU officials to task to explain the controversial closure of Teefe Trust Bank Ltd.

Bank of Uganda Governor Tumusiime Mutebile with Committee vice chairperson Anita Among

It was then that Mutebile told the committee that a wrong group was being roasted.

“Teefe Trust Bank Ltd was closed by the Minister of Finance (then Jehoash Mayanja Nkangi), and the person being put in the dock is Bank of Uganda,” Mutebile said.

This however led to further questions as to whether by invoking Section 21 of the Banking Act (1969) to order for the closure of the commercial bank, the minister acted within the law.

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.

The other banks that were closed are, 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).