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Insider Dealings: In Eye of the Storm, Stanbic Bank Pledges to Cooperate with Police

Stanbic Uganda, has promised to cooperate with investigators after the bank’s senior officials were accused of fraudulently selling themselves a client’s distressed properties.

“Stanbic Uganda will fully cooperate with the authorities to bring this matter to a close,” the largest financial institution said in a statement this Monday morning.

The bank was this week dragged to police by McDowel Ltd, whose property located in Luzira was allegedly sold to the bank’s employees.

The company Director, Beatrice Odong told police this past Wednesday that they acquired a loan from Stanbic back in 2017 and mortgaged their properties located on Plots 13, 4, 5 and 6 Works Close, Luzira.

Odong said her company complied and paid off the loan fully, only to learn later that their property has been sold off in March this year.

The property, she said, was acquired by Stanbic’s senior staff who used a front company they formed named Myriad Investment Club.

“Initially, the bank’s lawyer (one Andrew Munanura) claimed it had sold the property by public auction advertised in the Monitor to take place on December 6, 2019 yet there was in fact no auction,” Odong said in a letter to the Police’s CID.

“Our properties were actually grabbed through an insider dealing scheme between the bank and its employees using a front Myriad Investment Club Limited.”

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The company’s shareholders as per its registration papers are; Kenneth Kitungulu who is the Executive and Head, Global Markets at Stanbic Bank; Lawrence Kaweesa – Global Business Manager Stanbic Bank; Allan Muhinda – Interest Rates Dealer Stanbic Bank; Daisy Nitwe -Corporate – Treasury Sales Dealer Stanbic Bank; Emmanuel Rukeeba – Head Products and Analytics Stanbic Bank; Maureen Kembabazi Katwebaze who works with Stanbic IBTC in Nigeria and one ‘Thaib Lubega, the Treasury Manager Stanbic Bank Uganda.

“Kenneth Kitungulu and Daisy Nitwe signed the sale agreement as the buyer’s directors. The sale agreement was drawn by the bank’s legal department, colleagues of the buyers’ directors/shareholders. It bears the stamp of Head PBB Credit, Stanbic and signature of Denis Lugoloobi, Senior Manager Credit Evaluation signing for the bank,” Odongo told Police.

She also says the back employees acquired the properties at a low price of Shs. 1 billion.”

Stanbic today confirmed that “A criminal complaint against some of our employees arising from a property foreclosure process following a consent judgement against one of our clients has been brought to our attention.”

However, the bank said the matter was “subject to further court proceedings” and was therefore “unable to publicly discuss the merits of its case at this time.”

The case has since sparked a firestorm with members of the public calling for an in-depth investigation into the matter which could undermine public faith in the banking industry.

Stanbic said as “a responsible corporate citizen, Stanbic Uganda is committed to due process,” adding, “Accordingly, Stanbic Uganda will carefully consider if the allegation of inappropriate involvement of its employees in the foreclosure process has any merit.”

Under section 39(2) and (3) of The Mortgage Act, the sale of mortgaged property by a bank to its employees is a crime punishable by imprisonment of not less than 24 months.

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