A new security report has pinned Uganda’s super-rich Minister of Foreign Affairs for hatching a plan to take over the now defunct Crane Bank, with details describing it as an inside job carried out by the Director of Supervision Justine Bagyenda at the Bank of Uganda (BoU) without the knowledge of her boss, Emmanuel Tumusiime-Mutebile who heads the bank as Governor.
The report now in circulation within the specific corridors of power in this country alleges that three top BoU directors led by Ms Bagyenda reportedly connived with the flamboyant minister to have Crane Bank declared insolvent, as they planned to sell it to some Chinese investors.
The BoU directors are said to have given critical information to Minister Kutesa who in turn briefed the ‘so called’ investors on the ‘plan by BoU’ to sell the then third largest bank in the country, allegedly because the owners of the bank had tasked him to source for the would- be investor to recapitalize it.
The plan was reportedly hatched in 2013 and as all this was unfolding, the directors of Crane Bank were unaware of the deadly scheme, many now suspect to have been one of the causes for the collapse of the bank that was sold to rival DFCU Bank that made huge profits within six months after acquiring the former’s assets. DFCU made Shs114 bn for the first half of 2017 from Shs23bn in the same period last year.
However, at the beginning of year 2014, the three BoU directors are said to have told the Crane Bank management how ‘poorly the bank was performing and the need to recapitalize the bank. Sources say the management of Crane bank welcomed the advice as news to them because they had never been warned about ‘the poor performance’. This was the first sign that something was wrong somewhere in as far as BoU known procedures were concerned.
However, the report says in response to the need to recapitalize, the Crane Bank directors indicated to the BoU officials that they were recovering money from the creditors who had taken loans and that in a year’s time, the bank would have sufficient capital to operate normally. But BoU officials are said to have ignored the plea and instead continued with the underground scheme championed by Minister Kutesa to have Crane Bank sold against the wishes of owners.
The report indicates that Crane Bank management put insisted on running the bank and in the process the so called Chinese investors realized there was something ‘fishy’ and abandoned the deal. They are alleged to have given Kutesa USD500, 000 as a reward to secure them the deal.
At this point, the report indicates, the BoU raided Crane Bank and took over its management and later on brought DFCU on board. However, what remains unknown is whether DFCU was brought on board to cater for the interests of Kutesa and his colleagues in Bank of Uganda or not.
It is worth recalling that recently the US Federal Bureau of Investigations (FBI) cited Kutesa and his wife Edith Kutesa Gasana in plans to board off ‘a local bank’ to some investors. The couple has close ties with President Museveni, who has kept Kutesa in Cabinet since he captured power in 1986.
Kutesa recently had a stint as the President of the United Nations General Assembly, a position some analysts say he could have used to approach the Chinese investors.
Excerpt from FBI Report
In the documents presented before US magistrate judge Kevin Nathaniel Fox in New York city, attached emails show a trail of Edith Kutesa’s correspondence with Chi Ping Patrick Ho, a former home secretary of Hong Kong and head of a non-governmental organisation funded by the Chinese conglomerate. Her husband, who was president of the UN General Assembly (PGA) at the time, was copied-in.
According to the FBI report, Kutesa’s wife contacted Ho to announce the opportunity of actually acquiring a “Ugandan bank”.
According to Ho’s indictment papers, on October 13, 2016, she sent Ho an email titled “Opportunity to invest in banking sector “.
Therein she stated that the “central bank official you met during your visit has contacted us to inform you about the possible acquisition of a local bank but as you know, selling a bank is a very confidential and urgent process.”
In the email, she provided the website of the “Ugandan bank” which was to be bought and instructed Ho to express the energy company’s interest by sending a letter to the Deputy Governor of Bank of Uganda, Louis Kasekende.
“It is imperative that that letter is sent by close of business today through email,” she said. “In the mean time I would love to talk to you on phone.”
The FBI asserts that Ho forwarded this email to another employee whom he instructed to write to Kasekende. The FBI says a letter was subsequently written to Kasekende, copying Ho and Kutesa’s wife but it seems to have arrived late.
“According to press reports, on or about October, 20, 2016, the central bank took over the Ugandan bank…,” the US court documents state.
It was on October 20, 2016 that Bank of Uganda took over management of Crane Bank and suspended its board members.
The FBI investigation found that on or about October 24, 2016, Edith emailed Ho, copying Kasekende, stating, “I tried your number in vain, adding, “Please try to contact the vice governor as soon as you can.”
She provided a telephone number on which Ho could reach Kasekende.
“It is quite urgent, thank you,” she wrote.
Ho then emailed Kasekende, stating, “Please send me whatever you have through this mail.”
On October 25, 2016, the FBI says that he received an email from an unnamed BoU official who inquired whether the energy company was still interested in acquiring a bank in Uganda.
Ho is now in US custody along with Cheikh Gadio, a former foreign affairs minister of Senegal, on charges of international money laundering, violations of the Foreign Corrupt Practices Act and conspiracy to commit both crimes sometime between 2014 and last year. These crimes attract a 20-year jail sentence in the US.
