Katuntu extends Cosase tenure by two more weeks

MP Abdu Katuntu says it is better to do a thorough probe than to rush to submit a report to Parliament that leaves loopholes

PROBE | The Chairperson of the parliamentary the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase), Abdu Katuntu, has announced that his probe of Bank of Uganda will go on for another two weeks.

The Bugweri County MP was due to hold an exit meeting for his team on Monday afternoon with central bank and Finance ministry officials in to respond to concerns of shareholders of the seven banks controversially liquidated by Bank of Uganda.

However, he said the probe will now go on until February 22 to give the central bank time to adduce its evidence. He said extension of tenure was better than the committee executing shoddy work.

Sendo Cleaners

“We have a crisis of time much as we have a crisis, we need to do a thorough job. Just rushing because we are trying to beat the deadline will not help the process,” Katuntu said as he explained the latest extension to his tenure that expired a month ago.

In January, Speaker of Parliament Rebecca Kadaga closed off grumbling by Opposition over Katuntu’s leadership extension by declaring that she was the Speaker and that her word was final.

She said Katuntu must serve until probe into Bank of Uganda’s closure of seven commercial banks is complete and a report submitted to Parliament.

“I am the speaker of the House, I am the head of this institution and my proposal is good for the institution,” Kadaga said.

With the Speaker’s decision, it means that Katuntu has the liberty to extend his tenure as long as he informed the Speaker’s office.

New Cosase chair Mubarak Munyagwa took over Cosase leadership in January but with mandate over other probe sessions that might arise while Katuntu and his deputy Anita Among complete BoU probe.

“We would rather reach somewhere. And if we have not completed it, those who will come after us will complete it. We would rather utilize the small time we have, for whatever we are going to do, we need thorough examination,” Katuntu said on Monday as he adjourned the session with BoU officials.

The adjournment means the exit meeting that was slated to put an end to the bank probe ended prematurely as BoU officials failed to avail evidence to counter allegations brought against the central bank by former shareholders of the defunct banks.

Last week, MPs on Cosase interfaced with shareholders of all the closed banks. The shareholders made emotional presentations on what they described as illegal circumstances surrounding the closure of their banks.

No evidence

Bank of Uganda team led by Governor Emmanuel Mutebile were expected to table before Cosase evidence to expunge accusations brought against the central bank by former shareholders of the closed banks, but the team could only feed Cosase on narratives about what happened.

The Executive Director Bank Supervision, Twinemanzi Tumubweine, countered accusations by shareholders of Global Trust Bank who argued that loss making wasn’t only unique to their financial institution, but the challenge was cutting across to other banks that came into the market in 2008.

Twinemanzi said not only was Global Trust Bank making losses right from the time of inception, but the shareholders had written to the central bank expressing discomfort with the continued investment.

He read a letter he claimed was from Global Trust Bank shareholders saying they were getting tired of recapitalising the bank.

“Shareholders raised concerns over repeated costs of capital shareholders and were developing fatigue for capital call. At the time of closure, Global Trust Bank had made persistent losses of Shs60 billion,” Twinemanzi explained.

“They had been loss-making since inception in 2008 and this posed risks to depositors funds. If you look at the application of banking license by first years and grow profits by 500% in five years that isn’t a company looking for long term stay.”

He said that from inception in 2008 to 2014, the fianncial institution consistently posted losses except for one year.

“That one year is not considered when you are evaluating the performance,” Twinemanzi said.

However when asked to table documentary evidence of shareholders’ letter on fatigue of capital call, Twinemanzi had no letter, prompting MPs to ask to have the meeting postponed.

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