BoU on the spot over sale of Co-operative Bank assets
By Mike Sebalu
The Office of the Solicitor General has asked the Bank of Uganda (BoU) to explain the process regarding the sale of assets belonging to the defunct Co-operative Bank.
The Bank was established in 1964 under the Cooperative Societies Statute of 1963.
In a letter dated January 11, 2023, addressed to the Legal Counsel; BoU Margaret Kasule, the Solicitor General claimed that the details of the sale of the assets of the bank were needed as the Minister of Trade, Industry and Cooperatives (MTIC) Francis Mwebesa, had sought legal opinion regarding the re-establishment of the bank.
“Which Cooperative Bank did the Bank of Uganda actually sell? If is the latter, why were the assets of the former [Cooperative Bank established in 1963] seized and sold instead?,” the minister asked.
Meanwhile, the Director Communications, Bank of Uganda Charity Mugumya in an email response to KFM over the same matter confirmed that the Co-operative Bank that was established under the law in 1963, was transformed into a corporate entity in 1997 under the Company Act, as a precondition to receiving USAID funding.
Sher added that that transformed entity is what was closed in 1999 and whose liquidation was concluded on 25th July 2020.
“Reference is made to your email below and your query therein. The Cooperative Bank was established under the law in 1963, was transformed into a corporate entity in 1997 under the Company Act, as a precondition to receiving USAID funding. This transformed entity is what was closed in 1999 and whose liquidation was concluded on 25th July 2020,” the email reads in part.
This however caused the Minister for Trade to further wonder why BoU seized and sold assets of Co-operative Bank that was established under the Co-operative Societies Statute of 1963, yet it closed a different Co-operative Bank established in 1997 under the Companies Act.
Charity Mugumya could not respond to the matter as government revives efforts to have the Cooperative Bank re- established despite facing challenges of ownership.
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