By Our Business Correspondent
DAILYNEWS UG|Kampala, Uganda|
PricewaterhouseCoopers (doing business as PwC) is a multinational professional services network headquartered in London, United Kingdom. PwC ranks as the second largest professional services firm in the world behind Deloitte and is one of the Big Four auditors, along with Deloitte, EY and KPMG. The firm was formed in 1998 by a merger between Coopers & Lybrand and Price Waterhouse. Both firms had histories dating back to the 19th century. The trading name was shortened to PwC in September 2010 as part of a re-branding effort.
The Committee on Commissions Statutory Authorities and State Enterprises (COSASE) has summoned auditors of Price Waterhouse Coopers (PWC) to explain how they came up with 239 billion shillings under capitalization of Crane Bank Limited.
Price Waterhouse Coopers auditors were hired by Bank of Uganda to produce a forensic audit and inventory report on Crane Bank as at 30th October 2016 when the bank was closed.
A statement issued by Central Bank Governor Emmanuel Tumusiime Mutebile, following the closure of Crane Bank indicated that the financial institution was under capitalized and posed systemic risks to the banking sector.
“Crane Bank has been on the BOU watch list since September 2015 after regular onsite tests and external audit report. Crane Bank capital had fallen below the 50 percent legal requirement under the law,” said Mutebile then.
COSASE chaired by Bugweri County MP Abdu Katuntu while interfacing with Central Bank officials led by Governor Emmanuel Tumusiime Mutebile on Wednesday resolved to summon the PWC auditors after BoU failed to justify and explain how they reached a decision that Crane Bank was under capitalized by Shillings 239 billion.
This was after Kasilo County MP Elijah Okupa expressed disappointment for not receiving responses from Crane Bank officials concerning under capitalization.
Earlier, Ben Sekabira, the Director Financial Markets Development Coordination had said that BoU recruited PWC to do the inventory which confirmed deeper levels of under capitalization with Crane Bank’s core capital in negative 239 billion.
He said that this included paid-up capital by shareholders and profits made by the Bank in previous years.
Above: PWC’s Uganda Country Partner, Francis Kamulegya
But COSASE Vice Chairperson, Anita Among was uncomfortable with Sekabira explaining figures compiled by another institution. She also noted that the figures he was referring to where from a balance sheet yet the need to see the ledger where they were derived from.
“For PWC to arrive at those losses, they should have made an extract from that income statement, if we don’t have that attachment, we can’t verify especially if the previous year, they had made profits of 52 billion. We shall require the general ledger and income statement for the year under review,” said Mbarara Municipality MP Michael Tusiime.
A statement by the former Bank of Uganda Statutory Manager, Edward Katimbo Mugwanya that the general ledger was a huge document to produce was rejected by Tusiime who insisted that it is availed.
Mutebile promised that his officials were going to provide the soft copy of the general ledger on Thursday.
In the 2017 forensic Audit Report on the closure of commercial banks, Auditor General John Muwanga queried the failure by the Central Bank to prepare a plan to revive Crane Bank and the consideration of 200 billion Shillings from the bad books as the selling price for Crane Bank to DFCU Bank.