Global Trust Bank accuses BOU of being high-handed, demands Shs 316.5bn

Two years after its closure, Global Trust Bank is demanding compensation of more than Shs 316.5 billion from Bank of Uganda over they term as malicious and illegal closure by Bank of Uganda.

Four former executives of the bank led by Bayo Folayan appeared as witnesses before Parliament’s committee on Commissions, Statutory Authorities and State Enterprises (COSASE) that is probing the alleged irregular closure of seven closure of seven commercial banks.

While they admit that their bank has financial challenges, they disagreed with Bank of Uganda’s argument that Global Trust bank but instead accused the Central Bank of being ill motivated in the sale of their bank.

According to Folayan, the former Bank of Uganda executive director in charge of Banks Supervision, Justine Bagyenda invited them to discuss issues around Global Trust Bank’s financial performance but were surprised 16 days later when she sold off the bank.

This happened before a shareholders meeting could be convened to decide on the issues that Bagyenda had put before them which implied, according to Folayan, that at the time Bagyenda called them for a meeting, she already had a pre-determined decision to liquidate Global Trust Bank.

“From the above, it is obvious that great damage has been done to our business and we are demanding for $35.5million (Shs131.5 billion) with interest of 10% from the date of closure. We request Bank of Uganda to release four land titles and we are also asking for payment of $50 million equivalent to Shs185.12 billion,” said Folayan.

Bank of Uganda argues that Global Trust Bank which was closed on July 25, 2014 due to undercapitalization and corporate governance weaknesses. From the Bagyenda’s testimony before the committee, dfcu Bank was sourced to by Global Trust Bank through a phone call Bagyenda made to former DFCU Bank managing director Juma Kisaame on July 10, 2014 which was contravened the Bank of Uganda Act.