Business

BoU Opens up on Shs 10bn ‘Hidden’ on Secret Germany Account

BoU Communications Director, Christine Alupo

Bank of Uganda has denied claims it “hid” Shs 10bn on a “secret” foreign bank account, saying the funds were transferred to the Consolidated Fund.

The alleged BoU account in Germany was disclosed by the Auditor General in the 2014 audit report to Parliament, showing that since 2003 when the account was opened, it was not recorded in the central bank’s ledger.

“During (audit), we noted an amount of Euro 3,354,980 confirmed by Deutsche Bank Frankfurt in the name of Bank of Uganda but not recorded in the BoU general ledger,” said the Auditor General, Mr John Muwanga,

MPs on the Committee said the money was being “hidden so that it’s forgotten” and later taken by some individuals.

The Auditor General said Deutsche Bank first confirmed the balances to BoU in 2013, 10 years after the account was opened.

The Committee Chairman, Abdu Katuntu was visibly annoyed by the development, saying: “It is intriguing that Uganda has got some 3.3m Euros somewhere in a foreign account; it has been on a foreign account for 10 years, it is not in your books? What was it all about?”

In a statement issued Monday, the Central Bank’s Communication Director, Christine Alupo explained that in carrying out its role as Banker to Government, the central bank opens and executes authorized transactions on Government accounts both domestically and internationally.

“The account in reference was opened on December 17, 2003 on the instructions of Ministry of Finance Planning and Economic Development (MoFPED) in the Deutsche Bank in Germany,” said Alupo.

“The purpose of the account was to receive proceeds from the sale of shares in DFCU Bank by a German company called Deutsche Entwicklungs Gesellschaft (DEG), which until then had been a shareholder in DFCU Bank,” she added.

Alupo explained that the funds had been designated as a grant to the Uganda Government.

“During the process of preparing the annual statements for the financial year 2013/14, Bank of Uganda classified the DEG account as dormant, and accordingly informed the Accountant General in September 2013,” she stated.

“From the time the matter of dormancy was raised, it was handled between the BoU and MoFPED in line with procedure related to dormant accounts.”

Ministry of Finance spokesperson Jim Mugunga was quoted by the media as saying, “If Finance indeed asked for more information, I am not sure BoU provided the same. It is not true that Finance kept quiet, but it did respond by asking for more information from BoU.”

Alupo said authorization to close the account was given by the Accountant General, and in February 2015, the funds were transferred to the Consolidated Fund.

“The amount transferred was Shs 10,799,947, 297. The equivalent in Euros was EURO 3,354,089.54,” said Alupo.

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