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BoU Ordered To Recover 25 Missing Bank Land Titles

mmanuel-Tumusiime Mutebile

Bank of Uganda (BoU) has been tasked by John Muwanga the Auditor General (AG) to account for 25 properties that went missing following the takeover of Global Trust Bank (GTB) in 2014.

BoU has also been ordered to place caveats on all the lost titles to protect the properties and ensure that the titles are recovered.

On July25, 2014, BoU closed GTB over failure to become commercially viable but importantly protect customers’ deposits.

Emmanuel Tumusiime-Mutebile, the Governor BoU said since GTB was established in 2008; it had incurred persistent losses, which had accumulated to Shs60bn.

“There has been no improvement in the bank’s financial performance in the last five years and there is no realistic prospect that it would ever become profitable in the future,” Mutebile said.

He added, “… there were serious deficiencies in the governance of GTB and the accuracy of the financial information it reported to the BOU.

No commercial bank can survive indefinitely unless it is profitable. As such, GBT’s continued operations as a loss making bank would have posed a serious risk to the safety of its deposits. Therefore the closure of GTB was necessary to protect the interests of its depositors.”

The assets and liabilities of GTB were taken over by dfcu bank.

In the draft BoU audit report, the AG says at the time of closure of GTB, BoU correspondents indicated that 25 certified titles which had been taken to GTB as security for loans were found to be missing.

The AG adds that Article 4.2 of the Purchase of Assets and Assumption of Liabilities Agreement required the liquidator (BoU) to preserve and safely keep all files, books of accounts and records.

The report indicates that BoU didn’t transfer the titles in question to dfcu bank that purchase the assets and liabilities of GTB.

The AG’s report was compiled by March30, 2018 after a request by the Parliamentary Committee on Statutory Authorities and State Enterprises, state owned New Vision reports.

It adds that the report was then forwarded to BoU requiring them to answer the audit queries, but it was not yet clear whether Mutebile and team had responded.

The audit only covered GTB, International Credit Bank that was closed in September 1998, Co-operative Bank Ltd and Greenland Bank that were closed in 1999.

The preliminary report indicates that BoU had earlier refused to provide the AG with documents relating to the closure of National Bank of Commerce (NBC) in 2012,  Crane Bank and Teefe Bank, on grounds that there were pending court cases, challenging the closure of NBC and Crane Bank.

However, last week Parliament gave the AG Muwanga green light to audit BoU on the above banks.

 

 

 

 

 

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