The shareholders of Greenland Bank in liquidation have accused the Central Bank of fraud in the handling of securities for loans of the defunct bank.
While appearing before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on Tuesday, the shareholders led by Mr. Ahmed Nsubuga accused BoU of selling customer loans of the defunct bank at less than the value of the secured loans.
“The shareholders have been alarmed by the incredible discount of 93 percent offered by the liquidator (BoU) to buyers of the secured loans whose identity and whereabouts remain a mystery,” said Mr Nsubuga.
“The shareholders are in the dark as to what happened to the Bank, its assets and the whole process; there are no liquidator’s reports filed with the company registry with regards to Greenland bank Limited.
The liquidator should provide a clear cash flow analysis month by month, year by year, asset by asset and supported liability by liability,” he added.
The group laid out a detailed report and schedule of assets and liabilities that were purpotedly disposed off without maintaining any records or accountability of assets.
Among these was the sale of Greenland Bank Tanzania which they valued at Ushs38bn, the sale of shares in Westmont UCB valued at 10.45m dollars, Wheat Grain valued at 11m dollars among a host of other shares in various businesses.
Nsubuga told MPs that there were no account orders for sale of properties and the liquidation process was characterized by outright undervaluation of assets, use of unlicensed values and court bailiffs, creation of fake customer accounts and impunity in the disregard of court orders following several claims filed against the central bank.
He also highlighted the need to recover Shs147.9 bn as of 1999 (valued at 484.4bn today), which is a computation of the total asset base of the bank at the time of closure.
“During the period December 5, 1998, and March 31, 1999, when Bank of Uganda was managing the bank, it failed to win depositors confidence subsequent to which a number of depositors withdrew their deposits which culminated into discontinuation of the operations of Greenland bank,” said Mr Nsubuga said.
He has called for proper accountability of the entire period that Greenland Bank has been in Liquidation.
The Auditor General noted in his report that in December 2007, BoU signed an agreement with Nile River Acquisition Company to sell the debt portfolio of Greenland, International Credit Bank and Cooperative banks at only 25 million US dollars (about Shs.8.9 bn.)
