MPs pledge to carry on Central Bank Investigation amidst Museveni’s worries

By Our Correspondent

DAILYNEWS UG |Parliament|

Abdu Katuntu, the Chairperson of the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has vowed to continue with the public inquiry into the affairs of the Central Bank despite President Museveni’s call to have the probe into the closure of the seven defunct Banks by Bank of Uganda held in confidentiality, saying this would lead to speculations in public.

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But Mr. Katuntu has on Tuesday, in response to the president maintained the probe is in public interest and will continue.

The COSASE Chairperson explained: “It isn’t that we aren’t aware of potential dangers of the sector if we become reckless but I would like to comfort the President that recklessness isn’t our name in this process.”

Chairperson of COSASE, Hon Dr Abdu Katuntu consults with legislator Medard Ssegona. (FILE PHOTO)

Mr. Katuntu said that unlike fears in public, the probe isn’t aimed at hurting the institution but instead, it will make Bank of Uganda better, “We owe it to the public, if we lock ourselves in a room, it leads to speculation and remember at the beginning of this process, there is a lot of speculation.”

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While launching the new State House Anti-Corruption Unit at Kololo Independence Grounds on Monday, President Museveni said that although he approves of the decision by Parliament to probe the Central Bank, there is need to have the matters held behind closed doors.

The President said: “I think the procedure is wrong, because this is Bank of Uganda if you want to investigate it, why don’t it quietly not in camera because you can investigate in camera so that what people see is action, not endless arguments. I think the inquiry is good, they should inquire, but they are doing it the wrong way. I haven’t had time to speak to the Speaker.”

On November 1, Parliament through its Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) started investigating Bank of Uganda over the manner in which it closed a total of seven defunct commercial banks.

The committee chaired by Bugweri County MP, Abdul Katuntu is investigating whether or not officials at the Central Bank followed the legal procedure in closing; Teefe Bank, International Credit Bank Ltd, Greenland Bank, The Co-operative Bank, National Bank of Commerce, Global Trust Bank as well as the sale of Crane Bank Ltd.

The probe follows an Auditor General’s report that was made public in August and queries on how the central bank handled the closure of the seven commercial banks and how bank of Uganda spent over 400 billion on the closure of Crane Bank and half of this money is yet to be recovered.

Since it commenced the investigation, the committee has noted irregularities and instances where officials at the Central Bank, including the former Executive Director for Bank Supervision, Justine Bagyenda flouted the legal procedure.
Bagyenda is also being investigated over an incident earlier this year where she with the help of her driver and bodyguard allegedly smuggled documents from the BOU headquarters. The two aides have since been arrested.
On Monday, President Museveni said the probe, which he admitted was necessary, ought to have been done in-camera, to minimize the damage.
“I think the procedure is wrong. Because, this is Bank of Uganda. If you want to investigate it, why don’t you do it quietly? Why don’t you do it in-camera?” the President said.
“I think the inquiry is good but they are doing it the wrong way. I have not had time to speak to the Speaker but I think they are doing it wrongly”.
He admitted personally having “problems” with Bank of Uganda and having summoned the officials over the same.
Museveni said the Central Bank “has done a good job” by controlling inflation over the years and that the few wrong elements who could have infiltrated it will be dealt with.
“We shall get the facts. There isn’t much to worry about. But the method should be to confidentiality, get the facts and then we act,” he said.
“Because somebody who may not know may get worried thinking there is a problem in Uganda yet in fact there is no unsolvable problem”.
Some experts in the financial sector have already expressed concern over the probe whose findings so far, could send shocks in the markets as well as the exchange rate.

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They also fear that the negative impact could even be greater when the probe is narrowed down to last year’s closure of Crane Bank, which was the third largest commercial bank.

 

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