Greenland shareholders make demands
Mr Ahmed Nsubuga
Parliament- Shareholders of the defunct Greenland Bank want the central bank to account for the 20-year period in which their bank has been under liquidation.
Appearing before the House Committee on Commissions, Statutory Authorities and State Enterprises yesterday, the team of shareholders led by Mr Ahmed Nsubuga placed before the central bank administration demands which include unresolved liquidation of Greenland Bank and the whereabouts of the company’s wealth worth Shs699.6b.
Mr Nsubuga presented a list of areas for accountability, among them; computed residual interest worth Shs171.6b and Shs43b paid by Greenland Bank to privatisation unit.
He also highlighted the need to recover Shs147.9b as of 1999 (valued at Shs484.4b today), which is a computation of the total asset base of the bank at the time of closure.
Greenland Bank Limited was incorporated on August 3, 1990 and operated until 1999 when liquidation happened.
The Bank of Uganda took over management and control of Greenland in 1998, suspending the entire board of directors, including former managing Director, the late Dr Suleiman Kiggundu and consultants.
“During the period December 5, 1998 and March 31, 1999 when BoU 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.
The issues
Among the issues being probed by the committee chaired by Bugweri County MP Abdu Katuntu (FDC) is that the central bank sold customer loans of defunct banks at less than the value of the secured loans.
The Auditor General noted in the report that in December 2007, for example, BoU signed an agreement with Nile River Acquisition Company to sell the debt portfolio of Greenland, International Credit Bank and Cooperative banks at only $25m (about Shs8.9b).
The shareholders said they suspected fraud in the manner the central bank handled securities for loans and advances and in the disposal of land and buildings belonging to the bank, and its sister companies such as Greenland Bank Tanzania, Kenya and Zanzibar and all other bank assets in Tanzania.
Whereas he acknowledged that the bank suffered liquidity challenges at the time of takeover and that they had requested for a financial bailout of Shs10b from BoU, adding that the cause for the closure was far from liquidity, a matter was emphasised by the late Kiggundu.
“Our managing director (Mr Kiggundu) brought it to the attention of the Commission that there were other forces (and not liquidity of banks) that were out to ensure that all local banks close in preference for only international banks,” Mr Nsubuga said.
They asked the committee to at least secure the residual interest of the shareholders, on grounds that there is no option left due to foul play, mismanagement and lack of transparency in the process leading to the collapse of their institution.
The shareholders have asked the committee to task BoU officials to explain the whereabouts of the proceeds.
