Commonwealth Development Corporation (CDC) Group, a development finance institution owned by the British Government in December, 209 announced that it had sold off the 74,580,276 shares it held in dfcu Bank.
According to a notice published in local dailies, the shares, which translated to about 9.97 per cent were bought by Investment Fund for Developing Countries (IFU), a development finance institution owned by the Danish Government.
“This sale is a completion of CDC’s divestiture of it’s interests in dfcu following achievement of investment horizons,” the announcement read in part.
“As founder shareholder of dfcu, CDC was committed ensuring that the sale of its shares would be to an institution with a strong and credible profile.
However, the purchase deal is likely to hit a dead after IFU putting on table a tough condition for dfcu if they are to finalise the trade.
They want the commercial bank to avail minutes regarding the purchase of Crane Bank Limited on January 25, 2017.
According to Eagle Online news website, the demand by the Danish Company to look at the minutes has forced dfcu management to look at the possibility of approaching parliament and see if they can delete one of the findings of parliament’s Committee on Commissions, State Authorities and State Enterprises (Cosase) that investigated Bank of Uganda over the controversial sale of seven commercial banks between 1993 and October 20, 2016.
The finding they want deleted is that BoU transferred CBL assets without any minutes written, something that Cosase found unusual in the transaction of such a magnitude.
During the probe of BoU, the then Executive Director of Supervision, Justine Bagyenda confirmed to Cosase that the sale of CBL to Dfcu was done over telephone and that there was no any minutes written to effect the sale. The same was confirmed by MMKAS Advocates who were the transactional advisors acting on behalf of BoU.
Dfcu officials led by chairman board of directors Jimmy Mugerwa who appeared before Cosase as witnesses in the closure and purchase of Crane bank, made a defense presentation in regards to the terms of purchase of Crane bank agreement, however, the presentation was backed by fake documents which were neither dated nor signed by the bank authority. However, this prompted MPs of the committee to kick them out and allow them reorganize themselves.
“It’s prudent for this committee to throw out Dfcu team because they are so confused and disorganised; they are fidgeting with their own documents. It is in the best interest that dfcu withdraws and reorganizes themselves,” the then Cosase chairman, Abdu Katuntu said.
Sources have revealed that an attempt by former Deputy Governor Dr Louis Kasekende and top managers of dfcu to meet the Speaker, Rebecca Kagada have been rejected leaving them without any solution to CDC shares.
The last two years have been challenging to both dfcu and Bou after the controversial acquisition of Crane Bank and its properties.
The Central Bank has failed to defend its move to close and sell Crane Bank and that has spilled over to the operations of the once quietly operating financial institution.
Dfcu bank has of late decided to return freehold properties of Meera Investments Limited which had been leased to defunct CBL, back to Bank of Uganda, at a whopping cost of Shs47 billion even though it is understood it valued the same properties at Sh10 billion when it took over CBL.
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