Infighting threatens development Bank
Posted Sunday, February 10 2013 at 02:00
The bank has been in the spotlight in recent months and officials from the Inspector General of Government and police spent the better part of Friday in the bank following up on allegations that have been made to them
Uganda Development Bank (UDB) is caught up in a battle between sacked managers and the current management accusesome of the bank workers of providing information which the sacked officials use to fight them.
Bank officials accuse some workers of informing their former bosses on whatever happens in the bank in the hope that the new management will be pushed out.
The bank has been in the spotlight in recent months and officials from the Inspector General of Government and police spent the better part of Friday in the bank following up on allegations that have been made to them.
Arrest called off
A week ago, the police had to call off a planned arrest of one of the bank’s officials at the last minute. The official was accused of approving a $11m (Shs24b) loan yet the bank can only lend up to $3m (Shs7.2b).
The sacked officials have also petitioned the IGG and the ministry of Labour over what they say was wrongful dismissal and they are seeking payment of terminal benefits amounting to Shs580m.
The former team, which was led by Mr Gabriel Etou as CEO, was sacked by the new UDB board of directors led by Dr Samuel Sejjaaka over alleged mismanagement and fraud.
An internal audit report, authored by current CEO Christine Ojangole when she was chief internal auditor, pointed to nonperforming trade finance loans to the tune of between Shs10b and Shs30b. The report also pointed out cases of suspected fraud and collusion between bank workers and borrowers to give out loans that became nonperforming.
The Auditor General has since started a special investigation into the matter.
The sacked officials accuse the current management of what they say is even worse mismanagement.
Although Ms Ojangole declined to comment, the board chairperson, Dr Ssejaaka, said UDB has long turned into a limited liability company, and is therefore run under the Companies Act though it is still fully government-owned.
“My team is looking to transform UDB from an insignificant entity into a vibrant development bank similar to the Ethiopian Development Bank which finances big projects,” Dr Ssejaaka said.