MOTION FOR A RESOLUTION OF PARLIAME-NT TO INVESTIGATE BANK OF

UGANDA (SOU) OVER ITS ROLE IN THE SUPERVISION OF FINANCIAL
INSTITUTIONS
(Moved under Rule 47 of the Rules of Procedure of Parliament)

WHEREAS the Constitution of the republic of Uganda, the Bank of
Uganda Act Cap. 51, and the Financial Institutions Act, 2004 mandate
the Bank of Uganda, to formulate and implement monetary policy
directed to economic objectives of achieving and maintaining

economic stability;

AND WHEREASthe Bank of Uganda is charged with the responsibility of
administering banks and other financial institutions to achieve high
standards of banking practice and finical stability through;

(a) Continuous financial sector surveillance;

(b) Supervision, regulation, control and discipline of commercial
banks, credit institutions, microfinance deposit taking intuitions,
foreign exchonqe bureaus and the Credit Reference Bureau to
ensure safe and sound financial institutions and to identify

potential systemic risks.

AWARE THATin order to buttress the above mandate, Parliament in May
2015 approved UGX1.1 (One Trillion and Hundred Billion) for re-

capitalization of Bank of Uganda;

ALARMED that despite the Bank of Uganda being equipped with
rigorous mechanisms for supervision of Commercial banks; reports have
emerged of a decade long internal malfeasance in the management
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of Crane Bank, collusion, corruption, insider trading and fraud that went

undetected or was covered up;

DEEPLY CONCERNED THAT the systematic institutional failure by the Bank
of Uganda to fulfil its core statutory mandate is an indicator of
incompetence and potential complicity on the part of the Bank of

Uganda;

NOTING THAT following the eventual collapse and takeover of former
Crane Bank Ltd which was third in the market, the Bank of Uganda has
instituted a suit in the High court against the then majority shareholder

of Crane Bank;

AWARE THAT the collapse happened just overnight, yet it was stated
that it was the best performing bank in five (5) consecutive years;

FURTHER NOTING THAT Bank of Uganda is to clear shareholders of
financial institutions, did clear while Saphire Ltd which is domicile in
Mauritius and Mr. RasikKantaria without due diligence;

AWARE THAT Bank of Uganda provided UGX400 billion (Four hundred
billion shillings) to support the liquidity of Crane Bank which was in bad

shape.

NOTING THAT Ministry of Finance, Planning and Economic
Development issued a letter of Comfort of UGX 200billion (Two hundred
billion shillings) to help Bank of Uganda stabilize Crane Bank Ltd.;

AWARE THAT Bank of Uganda commissioned PWC to carry out a
forensic audit on Crane Bank and its inaction by Bank of Uganda.

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FURTHER NOTING THAT there are Constant inspection Reports by Bank of
Uganda on Financial Institutions;

ALARMED HOWEVER THAT there is a possible conflict of interest and
impropriety in the handling of Suit, since the law firm, Masembe,
Makubuya, Adriko, Karugabaand Ssekatawa Advocates (MMAKS)
representing Bank of Uganda, has previously represented Crane Bank
Ltd in various suits over the years;

NOW BE IT RESOLVED THAT PARLIAMENTconstitutes a Select Committee

(i) To carry out a comprehensive Investigation into the Role of Bank
of Uganda in the Mismanagement of former Crane Bank Ltd.

(ii) To inquire into and assess the performance and liquidity of Bank

of Uganda

(iii) To investigate the officers of Bank of Uganda who were charged
with the responsibility of carrying out routine supervision of Crane

Bank.

(iv) To investigate Bank of Uganda Inspection Reports on Crane Bank
and the action taken on it by Top Management of Bank of

Uganda.

(v) To investigate the role played by Bank of Uganda Top
Management in Crane Bank Saga.

(vi) To establish whether the UGX 400billion (Four hundred billion
shillings) which was put by Bank of Uganda in Crane Bank has

been recouped.

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(vii) To establish if the letter of Comfort of UGX 200billion (Two hundred
billion shilling) by Ministry of Finance, Planning and Economic
Development was utilized and under what authority it was issued.

(viii) To investigate the competence of Bank of Uganda in
management of Financial Sector which is the heart of our

economy.

(ix) To establish the relationship of MMAKS Lawyers who are the
lawyers of Crane Bank now acting for Bank of Uganda to sue

Crane Bank their Client.

(x) Any other matter which the House deems necessary.

Moved by NathanNandala-Mafabi, MP
BUDADIRI WEST

Seconded by: 1. Hon. Raphael Magy~·------
MP IGARA COUNTY WEST

2. Hon. MichaelKabaziguruka Mil. 0 . rL'
MP NAKAWA DIVISION /1/f-oVTJvv-

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