The Auditor General (AG) John Muwanga is under instructions of conducting an independent forensic audit to establish circumstances why the Central Bank donated Crane Bank to DFCU bank.
Mr Muwanga has already kicked off the process of searching for an independent audit firm to carry out an in-depth investigation.
This comes after Parliamentary Committee on Commissions, Statutory Authority and State Enterprise (COSASE) issued orders to the Auditor General to probe how many commercial banks but particularly Crane Bank was ‘handed over’ to DFCU cheaply.
Muwanga is expected to face The Committee in a period of 90 days with a comprehensive report of findings.
Hon Abdul Katuntu who presides over this committee clarified that the issue is “not why the banks closed only but how the whole process was conducted. Much as they (BoU) closed the banks and took them over, they have never submitted final reports on the winding up of all those banks.”
“The audit will also include the disputed agreement the BoU officials signed with Dfcu Bank in the sale of Crane Bank and other issues concerning accountability, supervision, guidelines and policies.”
Late last month it emerged that Crane Bank was sold to DFCU at a ‘laughable’ price of shs 200 billions with its assets and liabilities in trillions of shillings, prompting the defunct bank’s shareholders to raise concerns on what the intention of the Central Bank were.
Shareholders responded by threatening to take legal action as the agreement which BoU entered with Dfcu, two days before the sale on January 25, disregarded their (shareholders) rights and flouted the provisions of the Financial Institutions Act.
Dfcu bank shareholders in the eye of the storm are Arise BV (58.71%), CDC Group of the United Kingdom (9.97%), National Social Security Fund (Uganda) 7.69%, Kimberlite Frontier Africa Naster Fund (6.15%), SSB-Conrad N. Hilton Foundation (0.98%), Vanderbilt University (0.87%), Blakeney Management (0.63%), Bank of Uganda Staff Retirement Benefits Scheme (0.59%) and Retail investors (11.19%) among others.
The former Crane Bank shareholders also highlight a number of loopholes in the BoU – Dfcu agreement, such as the fact that it doesn’t state the value of liabilities assumed by DFCU or the value of Assets taken over by DFCU.
The office of the Auditor General confirmed to the media that the audit process has been started.
The office’s spokesperson Gloria Namugera audit into BoU operations will form the basis of Parliament’s inquiry into the central bank’s dealings, including the sale of Crane Bank to dfcu Bank.
“All those issues will be captured in our report to Parliament. The audit will be within the confines of the law. The National Audit Act is very clear on the mandate of the Auditor General. We will analyze the new issues and see how to incorporate them in the expanded audit into bank of Uganda,” Namugera told the press.
