Business

Bank of Uganda Sued Over Closure of Mbabazi’s Bank

Amama Mbabazi, one of the owners of the closed NBC chats with Governor Bank of Uganda Emmanuel Tumusiime Mutebile

54 former employees of the defunct National Bank of Commerce have sued Bank of Uganda, sick http://cerlalc.org/wp-content/plugins/woocommerce/includes/wc-page-functions.php demanding for their unpaid salaries, ask special and general damages arising out of the termination of the operations of the bank.

The employees represented by Fred Twinobusingye, and Frank Mutaremwa  through their lawyers of M/S Akampurira and Partners Advocates argue that termination of the bank’s operations without notifying them was unlawful and that the Central Bank should be held liable for their lost jobs and inconvenience.

They also demand for interest arising from their earnings before the “wrongful” termination of their running contracts at the NBC before it was liquidated.

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The Central Bank in September 2012, liquidated the bank in exercise of Section 88(1) and (b) of the Financial Institutions Act of 2004, before issuing letters terminating services of all its employees.

NBC was formed in 1991, and was named Kigezi Bank of Commerce, with a mission to provide banking services and inexpensive loans to the Kigezi Community.

During the mid-1990s, the Gidoomals, a family of Asian descent and Kenyan citizenship acquired 86% shareholding in the bank. In April 2008, the Gidoomal brothers sold their shares to former Prime Minister Amama Mbabazi and Dr. Ruhakana Rugunda and tycoon Amos Nzeyi.

While terminating the Bank’s operations, Bank of Uganda said it had determined that the continuation of NBC’s activities was detrimental to the interests of its depositors.

About a year before its closure, the bank was the 22nd largest commercial bank in Uganda with an estimated asset valuation of approximately US$20 million or slightly more than 0.25% of all bank assets in the country

The Kabale High Court registrar Samuel Emokor yesterday issued summons to the Central Bank to file its defense in 15 days from the date of service and failure would result   the case being heard and determined in their absence

On July 14th 2015  the affected former employees  of National bank of commerce petitioned  president Yoweri Kaguta Museveni seeking  for  his intervention to compel Bank  of Uganda to pay them terminal benefits in accordance with the law but nothing positive came out of the petition.

 

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