Bank of Uganda officials have unconvincingly labored to explain, why the sale of loan portfolios of three closed banks were sold at a huge discount.
The banks in question include Greenland Bank, Cooperative Bank and International Credit Bank.
Central Bank officials led by the Governor Emmanuel Tumusiime Mutebile this morning returned before Parliament’s Committee on Commissions, Statutory Auhtorities and State Enterprises, which is probing the irregular closure of several banks by the Bank of Uganda.
A forensic audit into the Central Bank by the auditor general notes that in December 2007, Bank of Uganda signed an agreement with Nile River Acquisitions, to sell the debt portfolio of the three banks at $5.2m.
This contract price represented just 8 billion shillings of a total loan portfolio from the three banks amounting to 135 billion shillings.
The Central Bank’s Executive Director for Bank Supervision, Tumubweine Twinemanzi, argued that estimating the recoverable value of a loan portfolio cannot be done with precision.
He also explained that no buyer can pay the full book value of a portfolio of bad debt.
However, Committee Chairperson, Abdu Katuntu, refused to accept this explanation, which he described as a generalisation.
He asked for records on evaluation reports on the loan portfolios and minutes of meetings that arrived at the decision to sell at a heavily discounted rate.
The liquidator agent at the time, Ben Sekabira promised to provide the records.
