The Speaker of Parliament, Rebecca Kadaga has ordered the Auditor General to go ahead and carry out a forensic audit into Bank of Uganda over the October 2016 takeover of Crane Bank and its subsequent sale to Dfcu in January 2017.
Kadaga’s directive follows a protest by BoU Deputy Governor Loius Kasekende who in an April 19 letter to the Attorney General, said the Auditor General has no authority to audit the Central Bank over its role in the closure of the bank in question, arguing that this contradicts the subjudice rule since the cases related to the collapse of the bank are before the High Court.
The audit was originally requested by the Parliamentary Committee on Commissions, Statutory Authorities & State Enterprises (COSASE) in April, following leakage of information including the sale agreement to Dfcu the revealed glaring irregularities in the take over and sale of Crane Bank. The audit will also include circumstances surrounding the closure of three other banks.
It is protests by Kasekende that prompted Kadaga to rule on the matter after the Solicitor General’s office bought Kasekende’s arguments, with Deputy Solicitor General Christopher Gashirabake, writing to BoU instructing them not to cooperate in the investigation.
In a May 10 letter to Mr. John F.S Muwanga, the Auditor General, Kadaga dismissed the opinions of the Solicitor General and said the audit should go on.
“In regard to the correspondence between the Bank of Uganda and the office of the Solicitor General and specifically in relation to the actions of Parliament, I am of the strong opinion that where any institution needs a clarification on a decision of Parliament, the right office to seek that clarification from, must be the office of the Speaker of Parliament. Therefore in response to your request for guidance, you should proceed with the audit as directed and submit your report to my office as is required by law,” Kadaga said.
Kadaga also clarified that the COSASE request for a special audit does not contradict an earlier ruling by Deputy Speaker Jacob Oulanyah in August 2017 barring a motion to investigate Bank of Uganda over its role in the supervision of financial institutions over the sub judice rule.
“This request by the committee is, in my opinion, clearly distinguishable from the Rt. Hon Deputy Speaker’s directive about the motion which was intended to be discussed…. The audit that you were directed to conduct has nothing to do with Bank of Uganda roles in the supervision of Financial Institutions. Audits are processes directed by the Constitution. I don’t believe that there is any public institution created by the law in Uganda that is not subject to audit,” Kadaga wrote.
Kadaga added that the “request from COSASE was premised their finding that there has never been any report by the Bank of Uganda on the defunct banks, namely: Teefe Bank, Greenland Bank, International Credit Bank, Cooperative Bank, National Bank of Commerce, Global Trust and Crane Bank.”
Kadaga’s letter was copied to the Deputy Speaker of Parliament, BoU Governor, Attorney General, Solicitor General and the COSASE Chairman,
Several MPs are with Kadaga on going ahead with the BoU audit, most vocal among them being Budadiri West MP Nandala Mafabi who says the ploys to stop the audit are a bid to hide “mafia in BoU.”
“Those are the mafias hiding what they have been stealing… I am certain that there is more plunder at BoU,” Mafabi said.
He wants the probe to not only focus on processes but also individuals, including Justine Bagyenda BoU’s former Executive Director in charge of supervision of commercial banks.
Recently, details of Bagyenda’s vast wealth including billions in several commercial banks and properties in prime areas were leaked by whistle blowers prompting inquiry by the Inspector General of Government and the Financial Intelligence Authority.
Kasekende has also been named in a Federal Bureau of Investigation (FBI) probe as having been involved in a plot, together with an unnamed BoU official and Mrs. Edith Kutesa (wife of powerful Foreign Affairs Minister, Hon Sam Kutesa) to secretly sell off Crane Bank, weeks before it was taken over by BoU, to CEFC China Energy Company a Chinese conglomerate.
COSASE Chairperson Abdu Katuntu weighed in on the issue saying entities being audited do not have the liberty to choose what should be audited.
“The arguments being raised by the bank of subjudice do not apply to auditing. Your report may not be discussed in Parliament if in the opinion of the Speaker, it is subjudice,” Mr Katuntu wrote to the Auditor General and BoU.
With BoU’s failure to block the audit, we eagerly await the findings.