Closed banks: dfcu makes U-turn on Crane Bank properties

Parliament. The value of the disputed properties and leaseholds of the defunct Crane Bank Limited that were taken over by dfcu in 2017 remain unknown after the buyers made a U-turn and admitted that they do not have a valuation report from the Chief Government Valuer.
The valuation report by the Chief Government Valuer has become a point of interest for MPs investigating irregularities in the closure of seven banks because it clears the air on the value of the 68 Crane Bank branches that were taken over by dfcu.
The report will also shed light on Crane Bank assets that its shareholders have told the Committee that they were worth Shs1.2t in 2015, two years before it was sold.
The report will also offer clues on the disputed Shs478b that BoU claims it injected into Crane Bank to help it remain afloat. However, the Auditor General and the former Crane Bank shareholders led by city tycoon Sudhir Ruparelia have disputed the figure. The MPs have since asked AG to audit the expenditure.
MPs on Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) since Wednesday faced frustration in their pursuit of the valuation report as dfcu officials yesterday made a U-turn from their earlier position that they have a valuation report by the Chief Government Valuer.
dfcu officials led by chairman Jimmy Mugerwa had told Cosase on Wednesday that they have a government valuation report but when MPs demanded that the report be tabled, the dfcu team promised to present it yesterday.
The committee proceedings were, however, thrown off-balance last evening, after dfcu officials led by the managing director Mathias Katamba, made a U-turn and said they only have a private valuation report by Ernst and Young, a firm that deals in tax, transactions and advisory services. The dfcu team included the former MD, Mr Juma Kisaame.
Committee chairman Abdu Katuntu and other MPs also questioned why dfcu chose to carry out a private valuation in May 2017, four months after the takeover of the bank and why there is no report by the Chief Government Valuer.
The lack of a valuation report by the Chief Government Valuer has been more critical because Mr Katimbo Mugwanya, the BoU official who acted as Statutory Manager during the takeover of Crane Bank by dfcu, has testified that he only got aware of the physical takeover after watching images making rounds on WhatsApp.
Testimonies from Mr Mugwanya’s evidence were played for dfcu team but they insisted that Mr Mugwanya participated in meetings leading to Crane Bank’s transfer to dfcu.

Questions
Committee vice chairperson Anita Among and MPs Vincent Wobwoya [Budadiri East] questioned why there are discrepancies between the valuation reports of Ernst and Young and those of dfcu.
“This private valuer which you brought has refuted your values. For instance. The value for plot 55 Jinja Main Street is Shs 400m in the sheet and the independent valuer gives Shs2b. Which one do we take?” Ms Among asked.
In dfcu’s defence, Mr Robert Ssawa, the bank’s co-counsel, said they have a list of properties and attendant values given by the Government Valuer but insisted the Government Valuer does not compile a valuation report.
The Committee ruled that there was no valuation report from the Chief Government Valuer and will have to decide on whether to have interviews from government valuers who were at some point involved in the transfer of Crane Bank to dfcu.
BoU officials have since admitted that they did not carry out a valuation of the CBL assets and liabilities but relied on inventory report and the due diligence undertaken by dfcu to arrive at P&A agreement signed on January 25 2017.