CID confirms commencing investigations against Kasekende, Bagyenda and Sekabira

Slightly over two years after an investigation by the Parliamentary Public Accounts Committee on Commissions, State Authorities and State Enterprises (PAC – COSASE) ended, with stern recommendations to punish Bank of Uganda officials implicated in the wrongful and illegal closure and sale of 7 defunct banks, shareholders of the closed banks could be about to see justice served.

The Criminal Investigations Department (CID) of Police has confirmed that it has started investigations into the matter with a view to bringing the accused officials to court to face justice.  

The investigations follow a petition by a one Nelson Habaasa and Brian Kakuru to the CID, asking that the police use the already existing damning evidence by the Auditor General and Parliament to bring Dr. Louis Kasekende the former Deputy Governor; Mrs Justine Bagyenda, the former Executive Director, Commercial Bank Supervision and Benedict Sekabira, the current Director Financial Markets Development to face justice.

“We did receive this complaint and by its very nature, it requires us to institute a team of very experienced investigators; a team of financial analysts, a team of auditors and at the same time, we shall also equally engage the office of the Director of Public Prosecutions (DPP), to ensure that the investigation is prosecution led/guided,” Charles Twiine, the CID spokesperson, told NTV, Uganda’s leading television station in an interview on Sunday, June 4^th 2020.

The moment you have experts constituted in an investigative team, it helps to expedite the investigation,” Twiine said.

The seven closed banks are: International Credit Bank, Greenland Bank, Cooperative Bank, Global Trust Bank, and National Bank of Commerce and Crane Bank.

Twiine said that if the investigations uncover any wrongdoing, the said officials will be made to face the full extent of the law and that no one is above the law.

“There is no one above the law. We have investigated, prosecuted, people whose positions are beyond the officials in bank of Uganda. And therefore I want to allay the fears of people; people should not worry that those people are above the law. No. There is nobody we cannot investigate. Let them wait. We are going to show them that the people who have been purporting to be above the law, they are going to be investigated. Our evidence is so chronological and scientific, that it will become inherently difficult for somebody to come with his politics to interfere with the evidence,” Twiine said.

Some of the major findings by the Auditor General and PAC-COSASE include: Bank of Uganda (BoU) illegally ‘sold’ Crane Bank, including UGX570bn worth of bad loans belonging to Crane Bank (CBL) shareholders, at a heavily discounted price of UGX200 billion and in the process “disadvantaged” the owners of the bank.  The MPs on the Hon Abdu Katuntu led committee also said the “casual and informal manner” in which BoU sold Crane Bank to dfcu, severally did not comply with various clauses of the Financial Institutions Act (2004) and was in “breach of all sound corporate governance principles.”

The Auditor General also found out that BoU, sold financial assets belonging to the defunct International Credit Bank (ICB), Greenland Bank and Cooperative Bank worth UGX135bn for a mere UGX8.9bn- a 93% discount!  The assets included UGX34bn of loans that had valid, legal and equitable mortgage supported by proper legal documentation. According to the AG, the UGX8.9bn sale price, represented 26% of the total secured loan portfolio and 7% of the total loan portfolio!

Another report by the Auditor General titled: “Special Audit Report on the UGX478bn injected into Crane Bank by Bank of Uganda” dated February 2019, also found out that of the UGX478.8 billion that Bank of Uganda injected into Crane Bank as liquidity support, UGX270 billion, ostensibly sent to Crane Bank customers in cash and Telegraphic Transfers couldn’t be traced to the final beneficiaries. BoU has also failed to produce audited books for the time it was in charge of Crane Bank, between October 2016 and January 2017 when the bank was sold.

The petitioners, have separately told NTV Uganda that they want to see justice done.

“We want to see this matter to its end and justice should prevail,” said Kakuru.

Habaasa said, he would like to see “the criminal department of police expedite, the investigations in the criminal cases of embezzlement, fraud and conflict of interest so that Ugandans can have value for money that was lost.”

Barely a fortnight ago, on Tuesday, June 23rd, 2020, three Court of Appeal Justices, Alphonse Owiny Dollo; Cheborion Barishaki and Stephen Musota unanimously dismissed all the nine (9) appeal grounds on which Bank of Uganda through Crane Bank (In Receivership) had sought to overturn an earlier August 26th, 2019 ruling by Commercial Court Judge, Hon Mr. Justice David K. Wangutusi.

Justice Wangutusi, ruled in favour of an application by Dr. Sudhir’s lawyers that BoU’s claims against the businessman did not stand since they failed on all preliminary principles of law and therefore the court could not go ahead to hear them. Delivering their ruling in Civil Appeal 252 of 2019, the three Court of Appeal justices also agreed with Justice Wangutusi and they, too, dismissed both the appeal and BoU’s main case. BoU was also ordered to pay costs, both at the Court of Appeal and the courts below.

BoU has said it is appealing at the Supreme Court.