Kampala, Uganda | THE INDEPENDENT | Businessman Sudhir Ruparelia says he was forced to acquire National Bank of Commerce (NBC), days after it was closed by the Bank of Uganda. Crane Bank Limited, according to Sudhir, paid sh1.12 billion as consideration of the agreement to take over NBC.
The National Bank of Commerce was majorly owned by businessmen from Kigezi region, among them former Premier Amama Mbabazi and Dr Ruhakana Rugunda, BoU Governor Emmanuel Tumusiime Mutebile, Amos Nzeyi, Jim Katugugu Muhwezi, Dr Ezra Suruma, and retired Supreme Court Justice George Wilson Kanyeihamba.
But the bank was dissolved in 2012 after 18 years of operations on the basis that it had incurred continuous losses with half of its loans not performing. According to the Central Bank, National Bank of Commerce had achieved no growth and its market share of deposits had fallen to 0.08 percent, making it the worst performing of the 25 commercial banks in the country then. Its assets and liabilities were transferred to Crane Bank.
But Sudhir says that Crane Bank was never interested in acquiring the assets and liabilities of the National Bank of Commerce-NBC, but was coerced by former Central Bank Executive Director Supervision, Justine Bagyenda, through a phone call placed to former Crane Bank Managing Director A.R Kalan.
Sudhir was appearing before the Commissions, Statutory Authorities and State Enterprises (COSASE) committee of Parliament today. The committee is investigating the closure and sale of commercial banks between 1993 and 2016.
Sudhir said that the Purchase of Assets and Assumption of Liabilities Agreement they signed with the central bank showed the assets that were transferred to Crane Bank with respective prices and set out the deposits and liabilities taken over by Crane Bank.
He denied allegations by NBC that Crane Bank took over their land in Kabale, saying Crane Bank had no interests in Kigezi. The committee also learnt from Sudhir, that the NBC bad book was not transferred to Crane Bank Limited but instead left as assets held in Escrow and belonged to the Central Bank.
With Sudhir’s submission, COSASE Chairperson Abdu Katuntu observed that the casual manner with which the central bank conducts business. He was making reference to reports that key decisions on the closure of banks were concluded through phone calls.
On Monday, former shareholders of the National Bank of Commerce, led by Mathew Rukikaire, the former NBC Chairman Board of Directors, former Prime Minister Amama Mbabazi and businessman Amos Nzeyi demanded sh295 billion as compensation for what they said was an illegal closure of their bank.
Former Prime Minister Amama Mbabazi said that the sale was based on bad motives by key persons within the central bank.