You’re undermining Mutebile, MPs tell BoU staff
Mutebile has often shocked the committee by revealing his ignorance of details that under normal circumstances would pass through his approval.
PROBE | Legislators have taken issues with officials at Bank of Uganda keeping governor Tumusiime Mutebile in the dark, with the latest about concerns raised by shareholders of affected commercial banks.
Mutebile on Monday told the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) that he hadn’t been furnished with any responses from shareholders of the closed banks despite assigning two staff to attend committee proceedings the whole of last week.
“I have not seen any of those correspondences,” Mutebile responded stone-faced to queries on whether he had had a chance to look at concerns raised by the shareholders of the closed banks.
Cosase was expected to wind down the probe in the circumstances under which the central bank liquidated seven commercial banks over the last 25 years. However, Mutebile has often shocked the committee by revealing his ignorance of details that under normal circumstances would pass through his approval.
In December, he told Cosase that he had not been debriefed by his juniors before documents related to the controversial sale of Crane Bank were signed off by then executive director in charge of supervision, Justine Bagyenda.
In another incident, MPs asked the governor about Teefe Trust Bank, controversially closed in 1993 but whose title deeds to at least 23 plots of land was quietly kept away by central bank officials for 25 years.
But Mutebile said he did not know of the existence of the land titles of client of the defunct Teefe Bank.
But on Monday, MPs took the issues seriously when it emerged that Mutibile’s ignorance meant they would not be getting responses to the concerns raised by shareholders of the closed banks.
Committee chair Abdu Katuntu said “When we were having the last meeting, I did ask Governor to assign officer to the Committee so they follow and brief you. You need to clean up your house, how, I don’t know.”
Kasilo County MP Elijah Okupa lashed out at two staff, Jonah Waiswa and a one Yiga, who are accused of not debriefing the governor. He accused them of attempting to fail Mutibile, wondering what motives they had to hide allegations raised by former bank owners from their boss.
“Unless someone wants to fail the Governor of Bank of Uganda. How can he be negligent irresponsible to the extent he can’t deliver the information. How sure are we that all directives have been given to the Governor,” said Okupa.
Yiga pushed the blame to Waiswa, saying it was upon his colleague to deliver the documents to the governor’s office, but Waiswa denied any wrongdoing saying he delivered the documents to the governor’s office, handing them to his personal assistant.
The counter accusations infuriated Finance minister Matia Kasaija, who informed the committee that he would have a discussion with the governor over the matter.
“I expect a responsible officer when handling matters of this seriousness, it isn’t a matter of delivering them, but to say that I delivered to the office, no. I think we shall discuss when we are out,” Kasaija said.
Katuntu chipped in to save face: “It doesn’t look good, it is so shabby, that is the state of affairs. If you are contented with state of affair, we aren’t.”
The probe into the closure of the seven defunct banks was due to end today after a grueling three months of grilling central bank officials past and present.
The probe has relied on an audit report by the Office of Auditor General.
The committee specifically requested the Auditor General to provide assurance on; the status of the banks at closure, cost of liquidation, status of assets and liabilities of the aforementioned banks from closure to date, non-performing assets, non-recoverable assets and liquidators.
The central bank closed Teefe Bank in 1993 due to insolvency, International Credit Bank Limited was taken over on September 18, 1998, as result of poor liquidity and insolvency.
Bank of Uganda also closed Greenland Bank on April 1, 1999, citing insolvency and violation of certain provisions of the Financial Institution Statute and later, the Cooperative Bank followed suit with BoU taking over its assets and liabilities on May 19, 1999, citing continued poor performance and non-compliance with regulatory capital adequacy requirements.
The National Bank of Commerce was on September 27, 2012 take up due to undercapitalization, while Global Trust Bank was closed on July 25, 2014, due to undercaptalisation and corporate governance weaknesses.
Crane Bank Limited is the most recent victim, closed on October 20, 2016, due to under capitalisation.
As a parting advice, Katuntu called for a well regulated banking sector especially the Banking Supervision department asserting that failure to have an efficient, transparent and strong supervision department would create a crisis at the central bank.
“As we protect the interests of depositors, we also need to give confidence to investors and see if they have moblised resources they need to be sure they have support of a strong supervisor,” Katuntu said.
The Cosase chair is expected to write a report and present to Parliament.