Museveni Moves to Save BoU from COSASE ‘Witch-hunt’

President Museveni has blasted the modus operandi of the Parliament Committee (COSASE) investigating the closure of several commercial banks by Bank of Uganda (BoU), saying the conduct of lawmakers is creating an “impression that there are unsolvable problems” which could have dire consequences for the country’s economy.

The President’s comments came high on the heels of concerns that the investigating MPs have over-politicised the probe and in some circumstances exhibited extreme bias towards BoU officials.

Museveni’s remarks also followed complaints that a wealthy businessman compromised the MPs to divert the course of investigation from fraud and money laundering at defunct banks to technicalities in the closure of the financial institutions.

In a televised address during the launch of State House Anti-corruption Unit in Kampala on Monday, Museveni said: “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?”

Museveni, officials said, is aware some individuals intend to divert media attention from the rot in the banks which compelled BoU to action.

“I think the inquiry is good but they are doing it the wrong way,” said Museveni.

Observers had even pointed out that COSASE members especially Mbarara Municipality MP Michael Tusiime; Buhweju lawmaker Francis Mwijukye, Anita Among and Abdu Katuntu appeared to be unfair to BoU officials.

At one moment, a lawmaker said former BoU Executive Director Justine Bagyenda should be booked at a rehabilitation facility to examine her mental status.


Such comments have raised concerns about the MPs’ impartiality and ability to conduct a reasonable investigation.

With MPs appearing to have an agenda, many feared the investigation would be driven off course to create an impression that the defunct banks were illegally closed.

Museveni’s speech seemed to resonate with Finance Minister Matia Kasaija’s submission to Cabinet that the harsh rhetoric at COSASE threatened to poison the country’s investment climate.


“I have not had time to speak to the Speaker but I think they are doing it wrongly,” he added.

Admitting that BoU had “some problems,” Museveni said the financial institution has “done a good job” in regard to controlling inflation and overseeing a fast-growing economy.

He, however, promised to “get all the facts” about the closure of the banks.

He insisted the probe must be held confidentially after which action can be taken against wrongdoers.

“Because somebody who may not know may get worried thinking there is a problem in Uganda yet in in fact there is no unsolvable problem,” he added.

The President’s concerns will most likely pile pressure on the opposition-dominated committee to pay more attention to the substance.

Some of the closed banks include Greenland Bank, Crane Bank, Global Trust, ICB, Uganda Cooperative Bank and Teefe.

For Crane Bank, BoU accused the owner, Sudhir Ruparelia of fraud, money laundering and falsification of information to mislead the money lender.

BoU Governor Tumusiime Mutebile said an inventory of Crane Bank assets and liabilities by a reputable firm “found that Crane Bank was massively insolvent, with core capital of negative Shs240 billion, as a result of mismanagement and fraud.”

He said the “notion that this bank could have been rehabilitated by its owners – the same people who were responsible for its failure – if only the BoU had provided more liquidity support and allowed the owners to remain in control, is not tenable,” emphasising, “In reality, the BoU had no other options, if it wished to minimise the losses incurred by the bank and protect the interests of its depositors, other than to take over Crane Bank and resolve it.”

Mutebile said the Financial Institutions Act provides for several resolution modalities; “for example, the failed bank can be sold as a going concern, it can be merged with another financial institution, it can be subject to a purchase of assets and assumption of liabilities transaction (P&A) or put into liquidation.”

Back to top button
Translate »

Adblock Detected

Please consider supporting us by disabling your ad blocker