Bank of Uganda Closed 1997 Cooperative Bank

  • Posted on: 7 February 2019
  • By: sanyu-fm-news

Bank of Uganda disposed of the Cooperative Bank, which started operations in 1997, the Committee on Statutory Authorities and State Enterprises-COSASE, heard on Thursday.
 
Hannington Wasswa, the Director Commercial Banking in Bank of Uganda disclosed this while responding to a query by COSASE Chairperson, Abdu Katuntu to clarify to members, which Cooperative Bank was disposed of.
 
 
Katuntu's query stemmed from claims by the shareholders of Cooperative Bank Limited that there were two cooperative banks.
 
While appearing before the Committee on Wednesday, Ivan Asiimwe, a former shareholder of Cooperative Bank limited explained that different Cooperative unions established Cooperative Banks in 1994 under the Cooperative Societies Act.
 
He explained that another Cooperative Bank was incorporated in 1997 under the Company's Act.
 
Asiimwe said the central bank closed the Cooperative Bank that was incorporated under the Company Act but wrongly confiscated the properties of the Cooperative Bank that was established under the Cooperative Societies Act.
 
 
Katuntu tasked Wassa to explain how the new cooperative bank came into existence in vain. He asked for more time to produce documents regarding the licensing and establishment of both banks.
 
Charles Owor, the former Banking Secretary of the original Cooperative Bank Limited dismissed claims by Wasswa that USAID was a shareholder in the new bank.  He also tasked Wasswa to produce the copy of the allotment of shares in the new bank.
 
 
Owor told the committee that the new bank took over the assets and liabilities of Cooperative Bank Limited but BOU intervened before the transfer process had been finalized. 

He also explained that government in collaboration with USAID incorporated a new bank to give cooperative societies majority shares and allow non-cooperative members or individuals to invest in the bank to raise capital.
 
Owor disclosed that the Registrar of Cooperatives authorized the new bank to use Cooperative Bank Ltd.  However, the Committee Vice Chairperson, Anita Among argued that it was irregular for the new bank to be registered in the names of the Cooperative Bank, according to the Cooperative Societies Act, Cap 1991. 

 
Katuntu thereafter ruled that since the new bank is the one that had been licensed by the BOU it was legally recognized by law. He advised the cooperative movement to seek remedy for the sale of their assets elsewhere since the committee is only handling issues regarding defunct banks.
 
The committee proceeded to listen to some of the clients of the defunct 1997 Cooperative Bank Limited. Chris Tushabe Karobwa presented explained to the committee how he lost some of his assets including the plot where Emin Pasha Hotel currently sits.
 
 
He reportedly bought 10 million shares at the time the bank was opened in 1997. Tushabe told the Committee that he wants his case resolved because President Yoweri Museveni and courts of law have tried to help him in vain.