Global Trust Bank owners want compensation

Louis Kasekende, Justine Bagyenda and Emmanuel Mutebile, review documents related to the sale of commercial banks while appearing before COSASE on Tuesday.

Senior officials from the now defunct Global Trust Bank(GTB) that was closed by the central bank have demanded compensation for the losses incurred during the sale of the bank. GTB was one of the commercial banks that started operations in 2008 and was closed in July 2014 on account of accumulated losses to a tune of sh60b.

While appearing before Parliament’s committee on commissions, statutory authorities and state enterprises (COSASE) chaired by Abdu Katuntu (Bugweri County), the officials led by the former executive director of GTB Olusegun Oyeyemi told MPs that Bank of Uganda (BOU) did not give them any audience and the closure was therefore an unjustified act.

Elias Edu, a former official of GTB, revealed that shortly before its closing in July 2014, there was a meeting at BOU chaired by the former BOU executive director for supervision of commercial banks, Justine Bagyenda, on the matter of corporate governance.

A letter was subsequently issued which gave the bank a checklist of issues that needed to be resolved.

“They did not give time to the shareholders to sort out the issues. We were to hold a general assembly, but in less than 21 days of the issuance of the letter, they came and closed the bank,” Edu said.

Bayo Folayan, GTB’s former managing director, said at the time of closure, the bank had a total of $36m (sh133b) invested by its shareholders through direct and foreign investment. “All this was destroyed in one day through the wrongful unjustified premeditated action by BOU.

Sh133b is not a joke; the shareholders have continued to bear the cost of this unjustified closure,” Folayan said. He also stated that over 200 employees of the bank were ‘prematurely terminated’ and never compensated.

The bank had plans of opening seven more branches, but all this did not come to pass with the abrupt closure of the bank. Folayan,however, expressed gratitude to the committee and ‘prayed that they receive the justice they deserve’ after the probe.

Oyeyemi said they were unfairly treated by the central bank.He argued that business was normal at the bank on July 25, 2014 but by midday the situation had changed with the entry of BOU officials who went with a letter announcing the takeover of the bank’s management.

“A public notice was also posted on the walls at the main entrance of the bank’s head office on Kampala Road, informing the public to the takeover of management of the bank by BOU,” Oyeyemi said.

Oyeyemi also stated that GTB injected $10.5m (sh35b) between January 2013 to May 2014 into the government treasury as compelled by BOU and the last equity capital investment was made on May 8, 2014, a month to its closure.

Oyeyemi also disputed BOU’s report that GTB was never going to make any profits after it incurred a loss of sh60b. He said this should not have been a basis for BOU to revoke the bank’s licence. The officials told the committee that they had never received a report or any kind of communication from BOU on the closure of GTB.

They demand that BOU discloses the amount that was realised from the sale of GTB’s loan book to dfcu Bank and the value of the various assets that were liquidated. Medard Sseggona (Busiro County North) asked the officials if they ever considered filing a law suit against BOU since they felt aggravated.

“We did not consider any legal action because of the friendly relations between the two countries (Nigeria and Uganda). We felt that this matter could be handled amicably, it was a decision taken by the shareholders. We are still hoping for better results,” Folayan said.

The queries raised by GTB officials were later on handed over to the BOU team by the clerk to the committee for a response. Meanwhile,MPs Odonga Otto (Aruu County), Elijah Okupa (Kasilo) and Francis Mwijukye (Buhweju County) tabled documents before the committee allegedly revealing the wealth of deputy governor Louis Kasekende, his wife Edith Kasekende, former executive director supervision Justine Bagyenda and the outgoing dfcu managing director Juma Kisaame.

But the chairperson of the Abdu Katuntu declined to discuss the documents and instead appointed a three member select committee composed of MPs Anita Among, Gen. Francis Takirwa and Sheila Mwine to determine the relevance and the authenticity of the documents in relation to the queries.

“We want to be transparent and fair. This is why we don’t want their details divulged before we critically analyse them. We want to verify whether they are true and relevant to the queries we are handling,”Katuntu said.