By our reporter
It has emerged that Britain’s CDC has under the table sold off its shares in DFCU to another offshore company without notifying Uganda Revenue Authority.
Reports emerging show that after reaping huge profits in the year 2017/18. CDC holds a 10% shareholding stake in DFCU Bank which it seeks to sell off to an offshore bank secretly.
CDCs Investment Director Irina Grigorenko wrote a confidential letter to the Chairman DFCU Bank Limited, Elly Karuhanga announcing CDCs desire to exit the now messy and turbulent Uganda Banking economy which is faced with a low value shilling, increase on excise duty from 10-15%, taxes on mobile money and poor savings.
It should be noted that CDC seeks to evade taxes on profits it acrrued as a share holder in DFCU BANK and is silently floating another foreign Financial Shareholder in CranemerebAfrica Limited and responsAbility Investment AG to become the Strategic Investors to replace CDC and allow it to exit the market minus paying taxes to URA.
However, CDC has not written to Uganda’s tax body URA of it’s intentions to sell off its shares to a third party or expressed any obligations to pay the necessary taxes on dividends.
This development however will most likely affect DFCUs core capital and it will further complicate DFCUs legal status as the bank is still struggling with a buttress of court cases which arose Bank of Uganda’s failure to regulate the local financial market that led to the closure of several banks.
WHO IS CDC
Britain’s Commonwealth Development Cooperation Group (CDC) owns a 10% shareholding stake in DFCU Bank.
CDC together with other foreign firms like Arise B.V together with Norfund, the Dutch Development Bank, acquired a sizable percentage of shares in DFCU Bank.
DFCU records show an impressive Shs127.6 billion net profit in the year ended 31 December 2017, up from Shs46.2 billion registered in 2016. This means that the profit increased by a record Shillings 81.4 billion.
The bank’s shareholders CDC of Britain and the others from Norway, Netherlands made abnormal profits when proposed dividends increased to Shs 51 billion in 2017 up from Shs 18.5 billion in 2016 and it is suspected that with such abnormal profits the CDC is pulling out in order to avoid paying tax or make losses in case Uganda’s economy continues to fail as the shilling stifles.