The former Bank of Uganda (BoU) executive director for supervision of commercial banks Justine Bagyenda has defended a decision by the central bank to sell off loan portfolios for three closed commercial banks, in the absence of valuation reports.
The loans were sold off at an astonishing discount of 93 per cent. According to the auditor general, the debt portfolio comprised of secured, poorly secured, unsecured and unknown loans amounting to Shs 135 billion from Greenland bank, International Credit bank and the Cooperative bank.
The Greenland bank loan portfolio was Shs 66 billion, the Cooperative bank portfolio stood at Shs 47 billion while the International Credit bank portfolio stood at Shs 21 billion. Out of the total Shs 135 billion loan portfolio, only Shs 34 billion was secured with properties.
However, in December 2007, BoU, with advice from JN Kirkland Consultants, signed an agreement with Nile River Acquisition Company to sell the debt portfolio for the three banks at $5.25 million. During the time, the US dollar was trading at Shs 1,676, which amounted to Shs 8.8 billion.
Evidence before the probe team indicates that the letter allowing Kirkland Consultants to ignore open bidding and select an exclusive buyer for the entire loan portfolio was signed by Bagyenda on September 25, 2007.
Bagyenda was tasked by the parliamentary committee on Commissions, Statutory Authorities and State Enterprises (Cosase) to explain her basis for selling the loan portfolio at a low price.
Bagyenda said that for over eight years, the central bank had been selling off the assets of the three banks and they were of the opinion that those that they had failed to sell were not that good. She insisted that the central bank hired M/S Bageine, a private firm to carry out the valuation of the bank assets. However, she could not table the valuation reports before the committee.
Cosase chairperson Abdu Katuntu asked Bagyenda to work with the current team at the central bank to ensure that all valuation reports are availed to determine the next course of action for the committee. However, Bagyenda declined, saying she cannot return to the bank, in the wake of allegations that she stole documents from the central bank.
Bagyenda's appearance before the committee yesterday morning ended weeks of speculation about her whereabouts. She had snubbed the committee on three various occasions, sending in communication that she had traveled to Houston, in the United States for the International Trauma Summit.
Clad in a purple suit, Bagyenda arrived at parliament by 10am, in the company of her lawyer Allan Nshimye. They had to wait for more than 30 minutes before the first legislator arrived. Unlike other occasions, Bagyenda was composed all through the meeting, while responding to queries from each of the members.
Bagyenda returns before the committee today Tuesday for further questioning in relation to a report by the central bank security director Milton Opio which detailed how she smuggled bags which are suspected to have been containing critical documents.
Two of Bagyenda's aides; a driver and a bodyguard, are currently held by the parliamentary police on grounds that they lied under oath after giving contradicting accounts regarding the stolen documents from the central bank.