AG Muwanga cited in controversial acquisition of shares of closed bank

AG Muwanga wrote BoU probe audit but took over shares of closed bank

CORRUPTION | Auditor General John Muwanga has a lot of explaining to do to convince the parliamentary Committee of Commissions, Statutory Authorities and State Enterprises (Cosase) that he acquired shares in Cooperative Bank legally.

Legislators on the committee were on Wednesday left dumbfounded and had to summon Muwanga to explain the circumstances under which he came to acquire shares of the defunct banks without the authorisation from the shareholders.

Muwanga, as the auditor-general, authored the August 2018 audit report on how the central bank controversially closed down seven commercial banks over the last 25 years.

Sendo Cleaners

The audit report forms the basis upon which Cosase’s probe into the central bank’s dealings is ongoing.

However, Wednesday’s session had to come to unceremonious close after Ivan Asiimwe, former shareholder of Cooperative Bank, accused Muwanga of being one of the individuals that controversially took over their bank.

Asiimwe told Cosase that the first Cooperative Bank was incorporated in 1964 and the second  in 1997, and that the shareholders of the first bank were shocked to learn of their bank having new shareholders.

“We want the committee to compel government to clarify on how they allowed individuals to register a company without resolution of shareholders. For you to come here and deliberate on such decisions, you must have the mandate but we don’t have this information,” Asiimwe said,

Muwanga, who was then a civil servant at Ministry of Finance, alongside Fred Nyakana, Anthony Ssekweyama, Joseph Nsereko, William Kalema, Samuel Magoona, Joseph Nsereko, Anthony Rugakasimbana were summoned to appear before the committee on Thursday.

Asiimwe told the committee that by the time Bank of Uganda took over their Cooperative Bank in 1999, their institution had 24 branches and six agencies.

He added that many questions that remain unanswered as regards the manner in which their bank was closed because the shareholders, who at the time were in unions and cooperatives weren’t involved in the day to day business of their bank, and therefore don’t know what led to closure of their Bank.

He said the decision to close Cooperative Bank led to loss of business in form of physical infrastructure, loss of shares and despite the Bank having buildings in Masaka, Jinja and Mbale, the former shareholders don’t know what happened to those buildings.

“We pray that Committee causes Bank of Uganda on which Bank was closed because we have two scenarios then we see another company registered on 20th November 1997 or was the Cooperative Bank owned by society of 1963 the one closed?” Asiimwe asked.

Faced with the tricky scenario, Cosase BoU probe chairperson Abdu Katuntu [Mubarak Munyagwa is the current committee chair but Katuntu has unfinished business in the BoU probe with the approval of Parliament] said that there was need to interrogate these accusations with the accused.

“The matters here have far reaching consequences. We are faced with two banks; Cooperative Bank incorporated in 1964 and Cooperative Bank incorporated in 1997. All these people mentioned none has appeared. I am looking at the names involved, including the Auditor General,” Katuntu said.

However, the Deputy Director of Commercial Banking at Bank of Uganda pushed the blame to Registrar of Companies, arguing that the central bank only licences a bank that has been lawfully registered.

He had to retract this statement, however, saying the central bank team would make a formal response regarding the matter.

Samuel Musana, director of Parliament Liaison from the Auditor General’s office, told the committee that Muwanga had informed him in a phone call of having signed the memorandum on behalf of Accountant General and that the Ministry Finance was taking over shares within the bank.

However, this response attracted more queries with MPs wondering how government took over Cooperative Bank without the cooperators personally selling shares to government.

“The Auditor General’s report is our basis and we find ourselves, that his name is being mentioned. We can’t resolve this issue until we talk to people concerned,” Katuntu said.

Leave A Reply

Your email address will not be published.

6 + ten =