Dfcu contradictions on Crane Bank acquisition baffle Cosase

BOU PROBE | Legislators on parliamentary Committee on Commissions, Statutory Authorities and State Enterprises ( Cosase) were on Thursday left looking at themselves every now and then as officials from dfcu Bank contradicted on circumstances surrounding the takeover of Crane Bank Limited.

The central bank took over Crane Bank on October 20, 2016 citing under-capitalisation and sold it to dfcu Bank in January 2017.

Last year, Katimbo Mugwanya, former statutory manager of Crane Bank when it was put under receivership in 2016 denied ever handing over Crane Bank legally, telling Cosase that he was shocked to see photos on WhatsApp of trucks ferrying documents as he was on his farm.

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However, defcu rejected Katimbo’s account of events with William Ssekabembe telling the committee that the former statutory manager had lied. He said Kitimbo was there in person to hand over Crane Bank to dfcu on January 25, 2017.

Dfcu told the committee that Crane Bank properties were acquired on January 25, 2017, and transfers registered in February 2017.

However, the officials goofed in one part of their “truth” when they they indicated that the takeover was followed by an evaluation of the assets by the independent valuers between April and May 2017 yet the Government Chief Valuer endorsed the valuation reports in February 2017.

This revelation baffled Cosase since dfcu was in effect admitting to riding a tricky cart in front of the horse.

“Am I right to say that all these valuations were done after you had acquired the property? How can you acquire the property that you haven’t valued? You acquired these assets on Jnauary 25, 2017, the first valuation you do is in April and May 2017, four months after acquiring the property,” Katuntu queried.

To retract the revelation and give another version at this point would have given dfcu away. Better to stick on a version already stated. Dfcu managers decided to do just that, defending their actions.

The officials said they first relied on valuation done during the due diligence who took into account of value of assets, backed by his professional knowledge to come up with value and the April to May 2017 was the formal valuation to be conducted.

The committee deputy chairperson, Anita Among, requested the combined team of dfcu board and managers led by Jimmy Mugerwa to furnish Cosase with Crane Bank’s asset register so as to enable the Committee cross check with Government Valuer.

However, the bank officials asked the committee to obtain a copy of Crane Bank’s asset register from the Central Bank, arguing that the document was retained by the regulator.

But Katuntu rejected this argument telling dfcu that they are the ones that dfcu bought Crane Bank and therefore took the asset register with it.

He tasked dfcu to clarify on how they took over Crane Bank formally.

“The statutory manager told this committee that he was at his farm and you were busy ferrying documents. Who handed over to you this bank since the Statutory Manager said that he wasn’t at the bank,” Katuntu said.

Ssekabembe explained that he had personally had several meetings at the main branch with the the former statutory manager. He said dfcu took minutes of those meeting.

When asked if Mugwanya handed over Crane Bank with an inventory of the assets and liabilities, Ssekabembe said; “We don’t necessarily have reports.”

This prompted the committee to put Ssekabembe on oath, and he maintained his earlier stand that Crane Bank takeover occurred with consent of Katimbo.

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