Bank of Uganda (BOU) did not do due diligence on the company that was contracted to purchase the loan portfolio of the defunct Greenland Bank, International Credit Bank and Co-operative Bank worth sh135b, Members of Parliament heard yesterday.
According to documents presented to the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) investigating the closure of the banks, BOU signed an agreement with Octavian Advisors, a US-based Company to buy off the loans. The company was contracted through Kirkland & Associates, a consultant hired by BOU to advise on the exit strategy of the loans.
After procuring the deal, the company reportedly contracted another Mauritius-based fi rm, Nile River Acquisition company, which also hired a local company, Sil Investments, to collect debts on its behalf. During the meeting, committee chairperson, Abdu Katuntu tasked the offi cials with explaining the circumstances under which Sil collected the debts and handed over the money to Kirkland & Associates All the offi cials, led by Deputy Governor Louis Kasekende, said they were not involved in the due diligence process.
On further questioning, BOU head of legal Margaret Kasule said: “I was not involved in the due diligence process. Kirkland knows.”
During the meeting, Benedict Ssekabira, who was in charge of liquidation, also denied being involved, but when the committee asked him about the trip he made to New York with Kirkland, he said he went to brief the company lawyers about the loans.
“I went to meet the lawyers because BOU had already made a decision to sell the loans to Octovian,” he said.
Former BOU Deputy Governor Opio Okello who signed on behalf of BOU said the loans were lumped up because there were fears that they would not get a buyer if they were classifi ed. MPs agreed to summon Kirkland & Associates, managed by Kakembo Katende, to appear and explain.
Parliament report pins BOU security over negligence
The driver, bodyguard of Justine Bagyenda and two other security assistants were yesterday handed over to Parliament CID Police for questioning over missing liquidation documents.
Juliet Adikorit, the bodyguard and Job Turyahabwe (driver) who were seen in the CCTV footage helping Bagyenda to take out three bags and a box containing documents while leaving the premises of BOU on February 10, told the subcommittee led by Brig. Francis Takahirwa (UPDF representative) that they did not know what was entailed in the parcels they carried out. However, in the CCTV footage that Takirwa’s team reviewed, they were able to see that the box which was open that Adikorit was carrying to the car had a blue folder and other documents. On her return from an external trip on March 14, Bagyenda and the duo were again captured offloading bags from her vehicle and taking them to her office and a few minutes later seen carrying the same bags (this time seemingly less full) back to her vehicle at about 6:00pm.
According to Adikorit and Turyahabwe, they drove from the airport to the central bank without making any stopover and arrived at 6:00pm, implying that the journey took about six hours. Takirwa in his report observed that there was a serious breach of the security policy of BOU, which stipulates that all persons shall go through security screening without exception and all items brought into the bank shall go through the same.
“But unfortunately on the two occasions, the rules were not adhered to,” Takirwa said.
Trouble, however, came when Milton Opio, the head of security, was asked to read the report of the GPS tracking device for Bagyenda’s vehicle, which contradicted the former’s statements. In the report, Opio read that the vehicle the trio was travelling in left the airport at 12:00pm traversed through Kibuli and was later parked in Kiswa Bugolobi, for about three hours, before it set off again, at about 5:00pm heading to BOU on March 14.
On establishing that the GPS report by Opio and Takirwa’s were contradictory to the statements made by Adrikorit and Turyahabwe, the enraged MPs on the committee accused Bagyenda’s aides of telling lies on oath, which compelled Katuntu to hand them over to the Parliament CID Police for interrogation. “I was kind enough yesterday to explain to you the implications of lying on oath.
I now hand you over to the CID officers, who will further take you on,” Katuntu stated. Other two security personnel, Charles Omolo and Beatrice Kyambadde, who were manning the area on the two occasions, respectively were also handed over to Parliament CID for interrogation, over negligence.