BoU fraudulently spent over Shs470bn in Crane Bank takeover – Auditor General - Daily Post Uganda

BoU fraudulently spent over Shs470bn in Crane Bank takeover – Auditor General

KAMPALA – The Auditor General’s report on the closure and take-over of banks has indicated that the Central Bank could have fraudulently spent over Shs478billion in the questionable takeover of Crane Bank before selling it to DFCU Bank at Shs200billion a few months later.

The report details how Bank of Uganda officials withdrew more than 478.8billion from an unidentified account in the bank to apparently offer liquidity support to Crane Bank Limited whose financial position was falling below the required 50 percent threshold.

The expenditure however according to AG, John Muwanga’s report did not provide a clear plan of how Crane Bank was to be returned to compliance and therefore contravened section 85 (5) and 90 (4) (c) of the Financial Institutions Act 2004.

Muwanga also questions how Governor Tumusiime Mutebile and his arrived at Shs200bn – a price at which Crane Bank’s assets and liabilities were sold to DFCU when there is no record of any valuation as required by law.

“I noted that BoU did not carry out a valuation of the assets and liabilities of Crane Bank Limited. In absence of the valuation, I could not establish how the terms for the transfer of assets and liabilities in the purchase were determined,” the report reads.

Wasted money

In addition, the AG questioned BoU’s extravagant expenditure after it emerged that the bank blew over shs459.9 billion in reviving Crane Bank, paying external lawyers, audit firms among others.

His report indicates that audit firm PricewaterhouseCoopers (PwC) was paid Shs1.3billion for services undisclosed raising a red flag about how the appointed service providers who also include KPMG – another audit firm (shs731m), city law firm, MMAKs which acted as BoU’s external lawyers before being kicked off the case was paid Shs3.9bn for legal service plus 5% commissions from money recovered from Crane Bank shareholders.

Other “unjustified” expenditures include Shs720.4 million which BoU never disclosed to the Auditor General and a payment of Shs21.5m to Meridian Surveyors for purposes of surveying tycoon Sudhir Ruparelia’s properties.

“I was unable to view and verify the approved requests for liquidity support and payments made by Crane Bank’s bonafide account holders and respective beneficiaries using the injected funds,” the AG says in his report.

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