Bank of Uganda governor Louis Kasekende at Parliament recently

MPs have said an investigation into the operations of Bank of Uganda (BoU) by Auditor General or Parliament must go on despite protests by the Central Bank.

Deputy Governor Bank of Uganda, Mr Louis Kasekende, 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 four commercial banks, including Crane Bank Ltd, arguing this contradicts the subjudice rule since the cases related to the collapse of the bank are before the High Court.

However, Shadow Attorney General Wilfred Niwagaba said it is only the Speaker who can make the decision on the subjudice rule and not BoU since the latter is a witness before the parliamentary investigation.

“It is the Speaker to decide that this matter is subjudice or not. The essence of the subjudice rule is not to prejudice a matter that is pending in court. Parliament is talking about an investigation to do with a forensic audit. How does a forensic audit affect the current proceedings between BoU and Crane Bank?” Mr Niwagaba said.

Budadiri West MP Nandala Mafabi, who petitioned Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) for an audit into BoU operations, accused BoU officials of trying to shield a “mafia” at the Central Bank.

“I am certain that there is more plunder at BoU. It should account for all the closed banks,” Mr Mafabi said.

Mr Abdu Katuntu, the Cosase chairman, had earlier written to the Attorney and BoU, insisting that subjudice does not apply to auditing.

“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’s letter reads in part.

Parliament is yet to select a committee to investigate the operations of the Central Bank since the Deputy Speaker Jacob Oulanyah said this was not necessary since Cosase and courts are handling the same issue.

MPs want to conduct a broader investigation into the management of BoU after some employees in March petitioned the House, accusing the Central Bank’s senior managers of misconduct.

They also want o comprehensively investigate the motive behind recent staff changes made by BoU Governor Emmanuel Tumusiime-Mutebile last month, which were resisted by some central bank staff. Inspector General of Government Irene Mulyagonja blocked the changes of eight executive directors, 13 directors, 24 deputy directors and four staff confirmations, key among them the transfer of Ms Justine Bagyenda, the former director of commercial banks supervision.

They will also investigate the circumstances under which Crane Bank was transferred to dfcu Bank without consultation of the key stakeholders. This website revealed that Crane Bank Ltd was sold to dfcu Bank by BoU at a paltry Shs200 billion without consulting the shareholders who valued it at Shs1.3 trillion.

The January 25, 2017 sale agreement was signed by BoU Governor Tumusiime Mutebile and Mr Juma Kisaame, the managing director of DFCU, without considering the interests of major shareholders of Crane Bank Ltd.

Last year, Amos Nzeyi, one of the shareholders and former chairperson of NBC, dragged BoU to Commercial Court for allegedly wrongfully closing his bank (NBC) in 2012. The assets of the bank were later sold to Crane Bank that also collapsed last year after becoming ‘significantly undercapitalized’. Nzeyi alleges that NBC’s financial health had stabilised by the time BoU closed it and now wants court to hold BoU for alleged failure of supervising the banking sector.

Recently, Meera Investments dragged Dfcu Bank to the Land Division of the High Court, seeking to reclaim its 46 branches which it says were acquired illegally following the dissolution of Crane Bank.

The closure of Crane Bank saw Dfcu bank become the third biggest bank after acquiring 46 branches from the financial institution.

Meera, in its law suit, claims that at the time BoU took over the management of then Crane Bank in October 2016 before its eventual sell to DFCU, it was the leaseholder of the suit properties and paying $6,000 every beginning of the year.

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MPs insist on probing BoU despite protests by Kasekende