UGANDA GOVERNMENT Vs DR. SULEIMAN IBRAHIM KIGGUNDU
My name is Suleiman Ibrahim Kiggundu. My curriculum vitae is herewith attached.
I hold a BA (Hons) in Economics from Makerere University, a Master’s of Science in Development Economics from Strathelyde University, a Masters of Arts in Mathematical Economics from Purde University, and a Doctorate in Economics from Boston University. I specialized in Development Economics and in money and finance in my doctoral studies at Boston University. I am therefore familiar with how money and finance can enhance development.
I have taught Development Economics and Money & Finance as a Lecturer in Economics at Makerere University, Boston College and Boston University, and as an Associate Professor of Economics and Business at the United States International University. As the Governor of Bank of Uganda, I was the Chief Economic Advisor to the Government and I was in charge of regulating commercial banks and other financial Institutions in Uganda. As the Managing Director of Greenland Bank, I was blessed with the opportunity of starting a commercial bank in a development context and growing it into a major national and regional financial institution.
I stand here to defend myself against the charges spelt out in criminal case number 718 of 1999. Integrity demands that classified information and dealings with others, especially at the highest level of state, be kept confidential. After exercising the utmost restraint and silence during the last 3 years, I am forced to reveal such information to defend myself against charges brought against me by those I sought to protect in the best interest of Uganda.
The evidence I am going to give will show that all transactions in counts No.5, 6, 7 and 8 of this case were done with full knowledge of, and without objection by, Bank of Uganda. I believe that is why Bank of Uganda, which is in charge of regulating banks, is not a complainant in this case and perhaps why the prosecution could not bring the then Governor Bank of Uganda, the late Mr. Charles Kikonyogo, to testify against me.
My evidence will further show that the Government of Uganda at the highest level from His Excellency, the President of Uganda, to his Ministers of Finance and the Head of Privatization Unit had full knowledge of, and consented to, the transactions with Westmont Land (Asia) and those relating to the purchase of UGMCA . The evidence will also show that all the disbursements referred to in the above criminal case were in respect of very secure investments and constituted little risk of a loss to Greenland Bank. The projects in question were solid, potentially profitable and generated significant employment and other benefits to the Economy of Uganda. Your Worship, the sequence of events will show that the closure of Greenland Bank and my arrest were potentially motivated. Bank of Uganda did not prefer these charges against me. It was the Executive as testified by Mr. Ayisu the CID officer, which preferred the charges.
BACKGROUND The closure of Greenland Bank and the charges against me were made amidst several false and unfounded allegations. For instance, there were persistent allegations that Greenland Bank was financing ADF rebels and that we were working with Sudan and Sudanese interests against Uganda.
These allegations were based in an article entitled “Uganda Rebels Claim Wealthy Backers”, in which the magazine stated that: “The alleged Greenland connection to ADF may help explain the stormy relationship between the bank and President Yoweri Museveni’s Government. The Uganda Government has long been wary of Greenland because of its association with Sudanese interests. The bank also rankled government when it allegedly held back a consignment of medication worth several million dollars destined for fighters in John Garang’s Sudan Peoples’ Liberation Army. It is thought that only a court injunction may have stopped Museveni’s administration from freezing Greenland’s Central Bank Account. The name of Museveni’s brother Major General Salim Saleh was until recently linked with Greenland bank and its sister company, Greenland Investment, but he and others have now distanced themselves possibly to pre-empt a concerted effort by the Government to rein in the Greenland empire and cut off links to ADF”.
Africa Analysis, March 1999.
As if to confirm the importance the Government placed on such allegation, in its repo the select Parliamentary Committee on Privatization wrote that: “The committee would like to express fears of possible political infiltration by Sudan through this (Concorp International’s) Economic Involvement with the Greenland Group”.
Report of the Parliamentary committee on privatization, December 1998. Other unfounded allegations were that the Greenland Group of Companies borrowed sums in the order of U.Shs.50 billion from Uganda Commercial Bank without security. In its statement, published on 9th December 2000 in The Monitor after arbitration in London, Mugerwa & Masembe, Advocates and Byamugisha & Rwaheru Advocates, the Government Lawyers in this matter, admitted that these allegations were found to be false. In this statement, the Government Lawyers confirmed that only Ushs. 13.4 billion was lent to Greenland Group of Companies and that these loans were regular and proper.
There were assertions by Government officers and the media that Greenland Bank was soon to be closed following the sudden closure of International Credit Bank, TransAfrica Bank and Trust Bank, all in the month of September 1998. This scared customers and resulted in Capital flight which weakened the Bank. But the Ernest and Young report of September 1998, which has been filed as evidence in this case, never recommended closure but that Ushs.7.3 billion be injected into Greenland Bank to make up for the non-performing loans and advances.
The Board of Bank of Uganda meeting in November 1998 approved a standby facility of Ushs.10 billion for Greenland Bank to help it contain deposit withdrawals arising from the negative publicity the bank was experiencing as a result of the foregoing allegations; the contagion effect of closing International Credit Bank, Trans Africa Bank and Trust Bank; and specific instruction given to some of Greenland Bank’s depositors by various parties, including donor agencies, to remove their accounts from the bank. But before this money was disbursed, the Government forced an intervention in the bank.
On 5th December, 1998 Major General Salim Saleh made a false statement to the effect that he had bought UCB, using Greenland Bank. The Government immediately forced him to resign as Military Advisor to the President. That same evening, armed police were deployed at all branches of Greenland Bank, to effect my dismissal as Managing Director of the Bank of Uganda and Bank of Uganda take over the next day.
On 6th December 1998, I received a letter from Bank of Uganda removing me as the Managing Director of Greenland Bank. It was also announced that the Bank of Uganda had taken over the management of Greenland Bank. The Government authorities in Uganda also talked to their counterparts in Tanzania and requested that a similar action be taken against Greenland Bank (Tanzania) Limited, a related but separate Bank incorporated according to the laws of Tanzania. The fact that Bank of Tanzania complied with this request, knowing that Greenland Bank (Tanzania) had no problems and was financially sound, was another surprise to us.
With effect from 7th December 1998, several C.I.D officers were sent to Greenland Bank (U) to carry out investigations, which lasted more than one month. No officers were sent to Greenland Investments, the company Major General Salim Saleh had purportedly used to purchase UCB. This flow of events clearly shows that the UCB incident provided the Executive with a convenient excuse with which to intervene in Greenland Bank (Uganda) and (Tanzania).
The Bank was closed on 1st April 1999. According to minutes filed in the Judicial Commission of Inquiry into the closure of Banks, there is no evidence of the Board of Bank of Uganda ever having recommended the earlier intervention in, or ensuring closure of, Greenland Bank. I was arrested and charged on the same day presumably to give the impression that I was the cause of the bank’s closure although I had ceased being, Managing Director four (4) months ago.
After closing the bank, on 6th April, 1999, Bank of Uganda appointed Deloitte & Touche as both auditors and liquidators of Greenland Bank at the same time. This was irregular because audits are done before decisions to close businesses are made and before liquidators are appointed. The audit report to be produced by Deloitte and Touche was therefore expected to justify the decision already taken to liquidate the bank. Their report to the commission, however, failed to confirm whether or not the bank was insolvent.
I will now proceed specifically with Counts No.5, 6, 7 and 8 of this case which relate to lending money to these companies in excess of statutory limits without the permission from Bank of Uganda.
PLOT 30, KAMPALA ROAD. Count No. 5 relates to the disbursement of Ushs.2 billion made towards the construction of the building, on Plot 30 Kampala Road, known as Greenland Towers. This disbursement, which was known by Bank of Uganda and made using external funds, was made in the hope that the value of the building would be taken as part of Greenland Bank’s share capital. The Governor was fully informed and even commended the idea of a permanent, high profile home for the bank at the opening ceremony in January 1994. He did not, however, agree that the value of the building be included as part of the bank’s share capital or assets. After further discussions with Bank of Uganda, it was decided that the ownership of ¾ of the building remain in the names of FIBA (U) Limited. FIBA (U) Limited gave full Powers of Attorney to Greenland Bank to enable the bank to have full control over this building against the disbursement. There is no way therefore that Bank of Uganda would have come 4 years later and sanctioned my prosecution in this matter.
Greenland Bank occupied 4 floors and the basement of this building from January 1994 till closure. The rent for each floor was US$50,000, giving US$200,000 annual rent payment for the 4 floors, excluding the basement. If Greenland Bank and FIBA (U) Limited reconciled their accounts to take into account over US$1 million in rent due for the 5 years of occupation to December 1998, the disbursement would more than fully be covered.
Furthermore, the building, which had no encumbrances, was valued at Ushs.10billion in 1997. The valuation report is with Bank of Uganda. Thus, even if the rent reconciliation did not clear this account the bank had full powers of attorney over the building. FIBA (U) LIMITED
Count No.6 relates to the disbursement of Ushs.4.3 billion to FIBA (U) Limited. This disbursement was made in respect of the purchase of the Uganda Grain Milling Company Limited (“UGMC”) by Greenland Investments. It was a disbursement made through FIBA (U) Limited to enable Greenland Investments to meet the purchase amount for the UGMC. FIBA (U) Limited acquired shares in Greenland Investments, which it would give up as purchase of shares in UGMC increased or, if necessary, through an International loan.
*In 1996, Major General General Salim Saleh, in the names of Caleb International, won a bid to purchase 51% of the UGMC. When he could not raise the money, His Excellency, the President of Uganda, telephoned me in December 1996 and asked me to help his brother regarding the payment for the UGMC shares. I told His Excellency that we could lend Major General Salim Saleh the money if the Government guaranteed the loan. He asked me to get in touch with Hon. Mr. Mathew Rukikaire, the then Mr. of State for Finance (Privatization), the next day for further discussions on this matter.
After discussions the next day with the Ministry and Major General Salim Saleh, we agreed that since it was difficult for the Government to guarantee the loan, the Government would allow Caleb International to assign 51% shares in UGCM to Greenland Investments, if Greenland Investments itself was able to raise the money without a Government guarantee.
Major General Salim Saleh agreed that Caleb International would assign its shares to Greenland Investments provided he was given a commission and reimbursed the costs he incurred in preparing and winning the bid. The agreed commission and costs was UShs.800 million. Ushs.300 million would be through Caleb International’s account in Greenland Bank and SHs. 500 Million would go to buying his company shares in Greenland Investments.
Hon. Rukikaire had that morning sent Mr. Keith Mukahanizi and Mr. Leonard Muganwa, the Executive Director of the Privatization Unit, to my office to finalize the arrangements. Hon. Joash Mayanja Nkangi, the then Minister of Finance issued the 51% shares in UGMC directly in the names of Greenland Investments upon payment of the bid sum to the Privatization Unit.
I informed the Governor, the late Mr. Charles Kikonyogo, of this arrangement before the payment was made to the Privatization Unit for the 51% shares in UGMC. I also informed him that we were going to use funds mainly mobilized from outside for this transaction and that these funds would be returned to sources as the public bought more shares in Greenland Investments or, if necessary, through an international loan. The Governor made no objection to this arrangement and said this was acceptable provided Greenland Bank addressed any subsequent liquidity requirements.
Greenland Investments decision to purchase 5% of UGMC was sound. In 1997 UGMC assets were valued at Ushs.17 billion. This meant that Greenland Investments had bought assets worth about Ushs.9 billion for Ushs.6.3 billion and that the related disbursement of Ushs.4.3 billion was well covered. As for Greenland Bank, which acted as the intermediary in this arrangement, it had created a big customer in UGMC that would enable it to access over US$12 million per year in revolving credit under the GSM program to support wheat grain imports from the USA.
In development terms, this transaction was sound because it allowed Ugandans to participate in the ownership of a major industry of good value. Greenland Investments had over 7,000 local shareholders. Through Greenland Investments, these shareholders owned 51% of UGMC, a company that produced wheat flour (Drum), Animal feeds (NUVITA), Bread (TIP TOP) and maize flour (Kob), and employed over 450 Ugandans.
This, in my view, is the way to develop a country with local people participating in major industries. In such instances, institutions like banks would be serving as engines of growth and development.
ENTEBBE RESORT BEACH Count No.7 relates to the disbursement of Ug.Shs.4.6 billion to Entebbe Resort Beach. This disbursement was also from a pool of funds mobilized from outside and this information was known to Bank of Uganda, both as bank supervisor and as a joint financier of Entebbe Resort Beach. Entebbe Resort Beach is on a 25 acre plot with a lake line extending over a kilometer. Entebbe Resort Beach’s developments included 6 permanent buildings, 3 restaurants, a health club, 2 swimming pools, a sauna, a Jacuzzi, a steam bath, an open air cinema, 2 squash courts, 2 large parking areas and a spacious garden.
The Resort Beach was in the process of completing a 5-Star Hotel that would offer 120 beds in the first phase and 50 others at a later stage. Negotiations with a South African company to fully furnish the hotel and manage it for the initial 5 years had been completed at the time of the intervention and the closure of Greenland Bank for leisure.
Bank of Uganda was fully aware of Greenland Bank’s Involvement with Entebbe Resort Beach, and it participated in the development of this project by extending over US$700,000 in loans to the project through Greenland Bank under the ITCRF program. This amount was used to purchase start-up equipment for the hotel, which had already arrived in the country at the time of intervention, included a shuttle bus, 2 pick-ups, a saloon car and all cutlery for the hotel.
The facilities at the Resort were valued at over Ug.Shs.12 billion by the time of the intervention. The registered owners of Entebbe Resort Beach were FIBA (U) Limited and Greenland Bank had a debenture on FIBA (U) Limited. Therefore there was no likely loss to the bank on account of this disbursement.
With its knowledge and involvement in this project, I see no way that Bank of Uganda would prosecute me unless there were reasons beyond their control. I am therefore not surprised that Bank of Uganda did not prefer charges.
WESTMONT LAND (ASIA) BHD Count No.8 alleges that Ushs.20.8 billion was lent to Westmont without the consent of Bank of Uganda. I want to state to this court that at the outset that this transaction was made with the full knowledge and consent of both the Ministry of Finance and Bank of Uganda at the highest levels.
While in Nairobi, on my way to Greenland Bank (Tanzania) Limited, I received a telephone call from Major General Salim Saleh. He informed me that if Greenland Investments could find a way of raising US$4 million within two days, Westmont Land (Asia) would assign its 49% shares in UCB to us. Westmont Land (Asia) Limited (“Westmont”) was finding it difficult to raise $4 million which was due to government by 28th February 1998.
Major General Salim Saleh was proposing to Westmont the same arrangement he had made with Greenland Investments over UGMC in 1996. I did not know anybody from Westmont but since Major General Salim Saleh a shareholder in Greenland Investments knew them, I trusted his words. This was an exciting opportunity for Greenland Investments to deliver, once again, on its objective of having Ugandans participate effectively in the privatization of enterprises owned by the Government.
It was also an opportunity for Ugandans to salvage UCB from the foreign hands. Our predecessors had founded UCB to assist indigenous Ugandans in business because they were not getting sympathetic facilitation from foreign banks. After the telephone conversation with Major General Salim Saleh, I contacted our outside friends who agreed to help us. I cancelled my trip to Dar-es-salaam and immediately returned to Uganda. The next day on 27th February 1998, we met with Westmont representatives at Major General Salim Saleh’s residence in Mbuya. This meeting was attended by Major General Salim Saleh, Mr. Muhoozi Kainerugaba (the President’s son) and Mr. Charles Mbire and other officers from Greenland Investments and Greenland Bank.
At this meeting, the purchase of 49% shares in UCB was agreed upon and an agreement was signed between Westmont and Greenland Investments. Under this agreement, Westmont agreed to assign its shares to Greenland Investments. According to the terms of the agreement of sale between the Government and Westmont, no such sale would be made without the consent of Government. That evening, therefore, Major General Salim Saleh arranged for Mr. Muhoozi Kainerugaba to take the agreement to His Excellency, the President, who was at his Kisozi Ranch at that time, to request for Government consent.
The following day on the 28th February 1998, Major General Salim Saleh and I were invited to meet Hon. Mayanja Nkangi, the Minister of Finance, at his office at 5:00pm. When we arrived at the office, the Minister was in a meeting in the board room with Mr. Bart Katureebe, the Attorney General, Hon. Mr. Mathew Rukikaire, the Minister of State for Finance (Privatization), Mr. Emmanuel Mutebirle, the Permanent Secretary of the Ministry of Finance, and Mr. Leonard Muganwa, the Executive Director of the Privatization Unit. At the end of the meeting, they all came to Hon. Mayanja Nkangi’s office to meet us.
After discussions, it was agreed that we could proceed with the transaction but to keep the matter confidential in order to avoid political controversy. It was further agreed that formal consent for the sale of Greenland Investments would be given after 3 years as provided for in the agreement of sale between the Government and Westmont. On the basis of understanding, we arranged for Greenland Investment to pay the US $ 4 million on behalf of Westmont that evening before the close of 28th February 1998. This was a relief to the Government officials who were getting embarrassed by Westmont’s inability to meet the conditions of sale for the second time. His Excellency, the President, together with top officials from the Ministry of Finance and Bank of Uganda, had visited Malaysia and met with Westmont before the award of the bid. The Government was thus keen to see Westmont perform to avoid being accused of having selected the wrong bidder.
According to the agreement of sale between the Government and Westmont, the balance of US$ 6 million was to be paid by end of March 1998. We requested for an extension of date of the final payment from end of March to the end of April 1998. This was granted by the Privatization Unit. A letter to this effect was written the next week. Fortunately, we managed to mobilize the US$6 million sooner and the payment was made before the end of April 1998.
Following this meeting, the technical teams of Greenland Bank, Greenland Investments and Westmont met and agreed that, to protect the sources of funds and the confidentiality of the arrangement, the deal be documented as “loan to Westmont” with a view of reverting to the sale agreement at the appropriate time. A “loan agreement” was therefore put in place between Westmont and Greenland Bank, as the intermediary between Westmont and the sources of funds. This “loan agreement” was to stand side by side with the purchase agreement until the time that the Government could give its consent in writing.
On the payment of the initial US$ 4 million, I gave a full briefing of what had transpired to the Governor, the late Mr. Charles Kikonyogo, and subsequently we had several discussions with him on this issue in his office. I informed him that we had used funds mostly from outside sources to finance the deal. These funds would be repaid through the issuance of new shares in Greenland Investments and if necessary by raising an International loan. The Governor consented to this arrangement. Given the confidential nature of the arrangement, we never committed anything to writing. As the Governor informed the Judicial Commission on the closure of Banks in reference to the proposed memorandum of understanding between Bank of Uganda and Greenland Bank in 1996, the matter was also handled on the basis of gentlemanly understanding whereby a spoken word between gentlemen is as good as a written one.
It was because of this knowledge that when asked by the Minister of State for Finance as to where the funds for the purchase came from, the Governor confirmed in his reply dated 11th April 1998 that the funds were from outside sources. When the pressure from members of parliament built up, the governor is reported to have told the select committee of Parliament that on privatization that; “Greenland Investment Limited has an arrangement with Westmont Land (Asia) of Malaysia to manage Uganda Commercial Bank Limited. Westmont only manages the bank and does not own a single share”
There is evidence to show that the funds Westmont used to pay for the shares were sent directly to its account with Greenland Bank. There are no debit entries on Westmont’s account to suggest that Greenland Bank lent its resources to Westmont. The testimony given to this court by the Manager, Foreign Exchange in Greenland Bank has already confirmed this. The above arrangement with Westmont was handled at the highest levels of state. There is no way, Your Worship, we would have chosen to inform the Government first if we had planned to act without the consent of the authorities in this matter. To do so would have been tantamount to reporting to the police before committing a crime. Neither would we have been so naïve as to mobilize funds from those sources to the tune of over US$14 million for such a venture without the agreement of the authorities. Your Worship, I want to refer you to pages 18 and 19 of Ernest & Young’s audit report of March 1999, which detailed the various payments made by Westmont under this arrangement. You will note that these payments were made to various parties, including UShs.913.7 million to Mr. Charles Mbire, Ush.125 million to Caleb International and Ushs. 38.1 million to Mr. Jovia Akandwanaho Saleh. Other payments were Ushs. 43.9 million to Lawyer Shonubi Musoke and Ushs. 48.3 million to Price Water house for the services they had provided to Westmont. All these payments were made on behalf of Westmont to cover its costs and commissions in this transaction.
According to this schedule of payments, there is one payment recorded against my name of Ushs. 5.9 million. This was paid out against my instructions by our Greenland Forex Bureau (Kenya) Limited in Nairobi to meet air travel and other expenses for Mr. Vijayan of Westmont, who was travelling back to Malaysia.
Your Worship, the late Martin Luther King once said that “the ultimate measure of a man is not where he stands in moments of comfort and convenience, but here he stands at times of challenges and controversy”. The problem with this deal is that when it became public all the people with whom we worked started distancing themselves from it. The more honourable among them was Hon. Mathew Rukikaire who resigned as Minister of State for Finance, Privatization) to avoid telling lies on this matter. My arrest and prosecution was just a way for the Government officials and the Head of State to try to distance themselves from the whole arrangement. I hope, however, that this Honourable Court will be able to put the pieces together and judge where the truth lies in this matter and hope justice will prevail. Finally, I wish to refer you to the “loan agreement” with Westmont, which has been filed as evidence in this case. The terms of the “loan” are spelt out on pages vi and vii of Ernest & Young’s audit report of March 1999. The share certificate for the 49% shareholding in UCB was deposited with Greenland Bank as equitable security and was not to leave the bank until the loan and the interest were repaid in full.
According to this arrangement, the outstanding amount due from Westmont to Greenland Bank as of today, would be in the region of Ushs.41.3 billion. In this connection, there is a court case between Greenland Bank and Westmont for the repayment of this loan which is not yet resolved. However, from the proceedings of the arbitration in London between the Government and Westmont, it appears that the Government of Uganda, together with Bank of Uganda, in total disregard of all this is trying to sell these shares to other parties without first recovering the outstanding obligation by Westmont to Greenland Bank.
According to the statement issued by the Government Lawyers following the arbitration in London between the Government and Westmont, Greenland Group of Companies and Westmont were cleared from all the allegations that had previously been made against them regarding the mismanagement of UCB.
Regarding the fraud allegations against Greenland or Westmont; the statement states that:- “When the claim (against Westmont) was filed, it appeared that Westmont had fraudulently converted UCB’s money for itself or for Greenland Group of Companies. However, claims must be proved. So when we took witness proofs and finally took witness statements for the exchange with the Respondent’s counsel we discovered that the claim for more than US$22 million and for which default judgment mentioned above (Entered in the High Court of Uganda) had already been given could not be substantiated”.
Your Worship, it is clear that the Government was prepared to do anything or say anything at different tunes that would enable it get back the 495 shares in UCB, and that seals my fate.
My fellow Ugandans, do you think that, we shall ever be happy in Uganda with our expectations of having a good country, when most of us have fear to unite as Ugandans, to stop Museveni of a Rwandese origin from ruling us? Let us make a decision before it is too late. Fear is the worst fuel for decision-making. Let us wake up, and act without fear to get rid of Museveni. We Ugandans, who really love a better Uganda, are tired of Museveni. So, if you keep on fearing and be glued in the same comfortable zone of fear as it has been for all the past years, this will prevent us from achieving our goal of overthrowing the Rwandese government.
And if we fail to achieve our goal, given the opportunity of Dr. Aggrey Kiyingi and other patriotic Ugandans who have seen it right and fitting to liberate our country, we shall regrettably start to lament about all the missed opportunities which Dr. Aggrey Kiyingi and those patriotic Ugandans, have created to liberate our country but were never used. Frankly speaking that will be the saddest moments, which we shall go through for years to come and also our future generations. Brothers and sisters, I am sure that there is still time to avoid such consequences in our country, if we work together as citizens who love our country. I strongly believe that, we can make Uganda a better country by stopping all the ongoing attempts of perpetually subverting our democracy, which is spearheaded by a wannabe Rwandese dictator Museveni
In other words, let us replace fear with love for our country Uganda, as well as courage and determination to overthrow Museveni’s government which is no longer serving Ugandans, but rather serves his interests and his ideologies which is evidenced by the way how Police and the army, that are supposed to protect the Constitution and the people of Uganda, instead protect the murderer Museveni his cronies and his corrupt henchmen. Ugandans, we have to work day by day to get rid of Rwandese out of our country. Let us therefore have that unconditional love for our country by sharing not only ideas but also contribute money, to tackle issues of utmost urgency which are affecting our country today. I am sure dear Ugandans that, that will help us build a new Uganda which will be ready to harness democracy.Museveni the President of a Rwandese origin, who should not even rule Ugandans, has ruthlessly targeted policies and programs that are intended to tearing apart our Ugandan culture and that is why Museveni always welcomes illegal immigrants day and night to enable him achieve his goals. Museveni and his administration have done everything in their power to demonize and terrorize Ugandans for no reason. My countrymates, together as people of the same country, we should contribute funds, and also give transformative ideas that can enable us kick Museveni out of power for him to become history like Adolf Hitler
Museveni and his administration which is full of Rwandese, in disguise of calling them Ugandans from the western part of Uganda, have committed countless abuses in Uganda, and it is the time for them to leave Ugandans in peace. His administration has kept on treating Ugandans with no respect, who are the owner of the country. Do you know why? It is because, Museveni himself in not a Uganda. So, let us work together as Ugandans by motivating ourselves, to have a fundamental transformation of our political system without Museveni. As Ugandans, it is our right and obligation to end Museveni’s lawlessness administration, which is immersed in rampant corruption and indescribable injustices, that we witness today in our country. We must completely object all those Museveni uses to convince us that, it is acceptable to keep silent when Museveni and his Rwandese brothers, sisters and in-laws openly violate Ugandan’s constitution. I want to urge all Ugandans that, enough is enough. We must fight against Museveni’s bad regime of governance. Museveni has been torturing and traumatizing Ugandans since he seized power. All his actions depict that, his intentions were not to liberate Uganda but rather to enrich himself and his family at the expense of taxpayers’ money and also to promote Rwandese supremacy in Uganda. It is really sad to hear that dear Ugandans. In fact, that portrays how shrewd and cunning Rwandese are. The word shrewd is from a Middle English adjective formed from the noun schrewe, meaning “an evil person, avillain.” (cunning) Having or showing skills in achieving one’s ends by deceit (deceit) the action or practice of deceiving someone by concealing or misrepresenting the truth.) That is exactly what Museveni does to manipulate his long stay in power as a life president.
Dear Ugandans, why don’t you be part of a historic struggles which is geared to getting rid of Rwandese out of Uganda? It is you fellow Ugandans who have to play a critical role in carving out a path to our victory of getting out of the captivity in which we are in our own country. Remember my countrymates that, it is we Ugandans who have to pave a way to a progressive Uganda, which will make our country a place where every Ugandan can truly thrive. Together as Ugandans, we can build a wonderful country in which education, human rights, health care among other things can be a priory to all Ugandans.
What really hurts is; Museveni together with his henchmen, always run a disinformation and propaganda campaigns using the media, which is in Museveni’s control to cover up their innumerable crimes and abuses they have done onto Ugandan citizens. It is really saddening to witness that; a number of Ugandans are being subjected to cruel treatment and any other forms of dehumanization that has led to lasting traumas. My fellow Ugandans, what you should know is; the horrifying conditions Ugandans live in today are not accidental. It was planned through Hima-Ttusi plan of ruling Uganda for 50 years, in which intentional strategies were to be implemented as we witness today, in order to weaken Ugandans so that the Rwandese can take over our country. The worst thing is, the situation is escalating but we have kept the hands on our chests, looking on (watching without getting involved) while cursing and lamenting saying that God will help us. I can assure you that, we are dreaming because, God help those who help themselves. We have to do something as Ugandans by reacting through actions.
Conclusively, I know that many Ugandans are yearning, and are indeed desperate and anxious to achieve our future democracy for the well-being of our country but, that will depend on how we can massively unite together, to plan for the leadership that can chart a path forward to a true Ugandan democracy which will allow equal opportunities, that Ugandans have long aspired for, but are always intimidated and limited by a Rwandese Wannabe dictator Museveni.
Dr. Suleiman Kiggundu, who died at 61 in South Africa, will go down in history as the man who established what became Uganda’s biggest indigenous private commercial bank within seven years of its existence. Greenland Bank. This was after serving as Governor of Bank of Uganda for four years.
But Greenland Bank would not live to realise its immense potential. It was closed on April 1, 1999, and Kiggundu arrested and charged with lending big sums of money in violation of the Financial Institutions Statute. In a written memorandum submitted to the Judicial Commission of Inquiry into the Closure of Banks on August 7, 2000, Kiggundu said his bank was a victim of politics, not bad economics. His 32-page testimony is summarised here below:
In its seven and half years of existence, Greenland Bank achieved phenomenal growth and acquired a domino position in the banking industry in Uganda. It became a model and a premier institution in the region, admired and envied by its peers in the industry. It made a significant impact on the public which held it in high esteem for revolutionalising banking.
The objectives of the bank were to provide efficient service with courtesy to all Ugandans and East Africans in general, provide employment and promote Ugandans in business. The bank started humbly with 18 members of staff with a deposit base of Shs 1 billion at the end of its first year in operation. At the time of Bank of Uganda intervention, it had a staff component of about 400 people, with a deposit base of Shs 78 billion and an asset base of Shs 88 billion in Uganda. In Tanzania the deposit base was TZShs 5.7 billion and an asset base of TZ Shs 6.8 billion.
All young institutions have teething problems. Greenland Bank was no exception as inspection and audit reports have indicated. But the bank was correcting all weaknesses here and there over time. Certainly the reasons for the bank’s closure were not because of these weaknesses. No inspection report or audit report at any one time ever suggested closure of the bank. The final report by Ernest and Young recommended a capital injection of Shs 12 billion, among other things. But Bank of Uganda decided to close the bank instead. Greenland closure
The real problem for Greenland Bank started on July 6, 1998 when The New Vision published a story that Greenland Investments/Bank bought UCB. This generated a flurry of attacks on Greenland which resulted in loss of deposits during the subsequent months. As I indicated in my letter to the Governor of November 13, 1998, Greenland Bank had lost up to Shs 16 billion in deposits from July on account of the panic that had been created in the financial market. It appears that the donors were very much rankled by the Greenland-UCB news.
Under the financial restructuring loan, the World Bank I understand had given money through Bank of Uganda, part of which was “to clean up” UCB, and thereafter sell it, perhaps preferably to some foreign outfit.
This would fit in well with their strategic interests. And here was the news that Greenland may have bought UCB through assignment! The foreign banks which had always been unfriendly and antagonistic to Greenland bank were now even more concerned about the combined force of Greenland – UCB, assuming the story was true. With the kind of market aggression and excellence of service Greenland had shown, the Greenland – UCB combination would provide them with stiff competition.
Meetings and consultations on how to handle the Greenland – UCB situation were understood to be going on in the donor community and among foreign banks. All donor related accounts, including all recipients of donor funds, were advised/ordered to move out of Greenland and other indigenous banks. This could be understood, following the reported problems on donor related funds in ICB [which had just been closed].
Garry Adams of the World Bank at some point, around October-November  convened a meeting of foreign banks’ chief executives, under the auspices of the Uganda Bankers’ Association (UBA). The agenda of this meeting was not disclosed but the meeting did not look right. At this meeting none of the indigenous banks was invited and neither was the Governor of the Central Bank.
I raised concern with the secretary of the UBA, as well as with the Governor over this method of work. At the local level, attacks were surprisingly coming in mainly from politicians who should have been the custodians of the interests of Ugandans. It is amazing how Ugandans and Africans in general often fail to understand their strategic interests.
One would have thought that people, especially Members of Parliament, would have wished that the reports were true, as this would have been a most welcome “salvage” of the institution which was created in the 1950s purposely to look after the interests of Ugandan Africans in banking and businesses. Instead of looking at issues strategically, we are fond of personalising issues, losing sight of the big picture.
One would have further thought that Ugandans would have been concerned over surrendering the control of all depositor resources into the hands of foreign banks because they would then fully control the pace and direction of our development.
If depositor resources cannot be used to for development as in the case of Greenland Bank, we are then sure to rely on donor funds with [their] conditionality and limitations for our development. Banks should play the stimulant role in our development and they should spearhead entrepreneur activities.
On the contrary, it seems that our people would rather ‘demonise’ indigenous efforts and in the extreme suggest, as some Members of Parliament have done, that it would be better to give UCB to the likes of Citi Bank ‘even for free’, than leave it in local hands. Little do we know that these banks had similar and probably worse problems in their infancy and that they have had many years of building and consolidation to what they are now!
It is apparent that some of these attacks were geared at both Major General Salim Saleh and myself, “two rogue animals” who bought or dared try to buy the UCB. Other attacks were directed at Greenland Bank/Group as an institution, which was founded on “sectarian grounds”, notwithstanding that it was serving the interests of all Ugandans.
The attacks were couched in terms of an anti-corruption crusade, in order to conceal the real motives. Even the very Members of Parliament who had earlier fought hard to ensure that UCB remained in the hands of indigenous Ugandans now changed goal posts. The affairs of Greenland Bank became a matter of media discussion contrary to all banking ethics. The sensitivity of banks was forgotten.
It was not because of fraud, losses, non-performing loans, insider lending that the bank was closed. All the frauds, which were few compared to other banks, were always provided for from our annual income. The bank had no losses, except in 1998 when all profits were used to provide for doubtful loans. It is because of non-performing loans that the auditors wanted the shareholders to inject in an extra Shs 12 billion as share capital in addition to Shs 11.2 billion which had already been set aside by the bank. Despite the provisions, most of the loans were well secured and quite recoverable.
The insider loans were well secured and they constituted good business for the bank both in the short and long-run. Much has been said about the Shs 37 billion off-balance sheet investments declared in my hand-over letter dated December 7, 1998 to my successor, as amounts previously invested outside the balance sheet of the bank. This again was not the cause of the closure of the bank. The bank was running a “Managed Funds Portfolio” from which it financed these investments.
This concept is not new in banking. It is a novel way frequently used in developed market systems. Funds are taken in trust and invested with the knowledge of clients. These funds are always managed as a separate portfolio outside the bank’s assets and liabilities.
It is further pointed out that managed funds portfolio accounts are not subject to statutory regulations. Northern Trust, City Corp., Credit Swiss and Barclays are given as examples of institutions which have asset management portfolios.
These funds were put in good investments which have an estimated value of Shs 78 billion. Among these is the ‘alleged lending to Westmont’ which would now be worth over Shs 30 billion (principal and interest) due to Greenland Bank. Greenland Bank is in possession of the share certificate for the 49% ownership in UCB. If the loan is not repaid, Greenland Bank would be entitled to the 49% ownership in UCB. It is perhaps because of this, that the decision to close Greenland Bank was made, to forestall the possibility of this eventuality.
Purchase of UCB
The reasons for the closure of the bank were external to the banking industry in the strict sense. The decisions to intervene and to close the bank were not independently taken by Bank of Uganda and there are no minutes of the Board of Bank of Uganda to this effect.
In fact, the Board of Bank of Uganda from the minutes provided, had just approved a Shs 10 billion standby facility to help the bank sail through the run which had resulted from the contagion effect of the closure of three banks in a month and the persistent negative press reports on Greenland Bank for its “alleged purchase of UCB”. The major reason for the closure of the bank was its “alleged purchase of the UCB”.
These allegations irked the donor community, the foreign banks, some Members of Parliament and certain sections of Government. These formed an alliance which forced Bank of Uganda to intervene in Greenland Bank, an action they were not prepared for. The parties mentioned above were so bent on repossessing the UCB, and invoking the FIS (Financial Institutions Statute) seemed to be the only way out. Bank of Uganda, I believe, was prevailed upon to take over management both in UCB and Greenland Bank in order to achieve the objective.
Allegations to the effect that I had violated the FIS were made, although both Bank of Uganda and the Government were aware of all the transactions. Donors, particularly through the World Bank envoy Dan Moses, were pressing Bank of Uganda to close the Bank, one month after its take-over of management.
Bank of Uganda finally yielded and closed the Bank on April 1, 1999. As an excuse, I was arrested and charged on the same day. The court trial has been going on for the last one and a half years. It is Buganda Road Chief Magistrate’s Court Criminal Case No. 718 of 1999; Uganda vs. Dr. Suleiman Kiggundu. This case relates to alleged decisions purportedly attributed to me when I was Managing Director of Greenland Bank 1991 – 1998. Financing rebels?
Another contributory factor to this decision was perhaps the allegation by the Military Intelligence that Greenland Bank was financing ADF rebels and working with the Sudanese Government against Uganda.
In an article, The African Analysis of March 1999 wrote: “The alleged Greenland connection to ADF may help explain the stormy relationship between the bank and President Yoweri Museveni’s government. The Uganda Government has long been wary of Greenland because of its association with Sudanese interests. The bank also rankled government when it allegedly held back a consignment of medication worth several million dollars destined for fighters in John Garang’s Sudan Peoples’ Liberation Army. It is thought that only a court injunction may have stopped Museveni’s administration from freezing Greenland’s Central Bank account. The name of Museveni’s brother, Major General Salim Saleh, was until recently linked with Greenland Bank and its sister company, Greenland Investments, but he and others have now distanced themselves possibly to pre-empt a concerted effort by the Government to rein in the Greenland Empire and cut off links to the ADF”. Africa Analysis, March 1999.
A member of the Select Committee of Parliament on Privatisation had earlier made similar allegations when he asserted during my appearance at the committee that they could not allow a major bank to go into the hands of people who were working with the enemies of Uganda, namely Sudan. Although the chairman of the select committee tried to quash what was regarded as ‘classified information’, the cat had already been let out of the bag. This fallacy was apparently held in several quarters of Government.
On December 4, 1998, Major General Salim Saleh issued a statement claiming that he had bought UCB using Greenland. That night, Police was deployed in big numbers at all Greenland Bank branches in the country. The next morning, Sunday, December 5, a letter dismissing me from the position of Managing Director of Greenland Bank was delivered to my residence by no less a person than the Executive Director, Bank Supervision. What a coincidence!
These actions underscored the sense of urgency of the decision that was supposedly made by the Central Bank on Saturday although there is no evidence of any Bank of Uganda Board meeting discussing any intervention in Greenland Bank. The coincidence of this decision with Major General Salim Saleh’s statement of the same day is one of the Seven Wonders of the World.
Within four months of Bank of Uganda intervention in Greenland Bank, the deposit withdrawals continued and Bank of Uganda was unable to stem the deteriorating confidence of the public in the bank. The bank’s clearing account worsened, from negative Shs 5.8 billion as of December 5, 1998 to negative Shs 24.4 billion by end March, 1999. Bank of Uganda, instead of standing firm, panicked and abruptly closed the bank.
Bank of Uganda, the Government and its foreign backers, would have preferred to pay out Shs 62 billion to depositors and close the bank, instead of allowing the bank to overdraw its account by say an extra Shs 10 billion and keep it running. This would have enabled the continued employment of about 400 Ugandans and continued service to more than 120,000 customers who revered the bank.
Closing Tz branch
Equally baffling was the closure of Greenland Bank Tanzania at the request of the authorities of Uganda. Greenland Bank Tanzania was not a branch of Greenland Bank Ltd. It was a separate bank, locally incorporated under the laws of Tanzania and under the supervision of Bank of Tanzania. At the time of its closure, Greenland Bank (T) was in a very healthy position. It had a deposit base of TZ Shs 5.7 billion and a cash holding of TZ Shs 3.5 billion, giving it a liquidity position of 62%.
Its loans and overdrafts were TZ Shs 2.5 billion, giving a lending ratio of only 44%. One year after the closure, virtually all these loans and overdrafts were recovered and the Governor authorised all depositors to be given all the money standing to their credit at the time of closure, using the bank resources.
This has already been done and terminal benefits to all workers have also been paid. The bank now retains some balance and all the assets of the bank in Dar-es-Salaam and Zanzibar remain intact. For us as promoters and shareholders, we shall always remain wondering why the bank was closed.
In both cases, it is pertinent to think that the closure of Greenland Bank here in Uganda as well as in Tanzania was a punishment imposed because of some kind of wrongdoing, but not strictly because of financial reasons. [I decry] the unwarranted destruction and desecration of Greenland Bank and the desperate attempt to damage the hard-earned reputation of its founding Managing Director. “He who steals my purse steals trash. But he who steals my reputation steals that which is nothing to him, but everything to me” – William Shakespeare
After my imprisonment and release on bail, I met H.E. the President, on April 25, 1999 together with the Chairman of the [Greenland] Board of Directors Hajat Masituula Mayanja and some other shareholders.
After making our presentations to him on the affairs of the bank, he conceded that Bank of Uganda was wrong to close the bank before listening and giving an opportunity to the shareholders to correct the situation.
The President agreed that Bank of Uganda should have given conditions to the shareholders which if they failed to fulfill, then it would have been justified to close the bank. The President promised to have the decision reviewed and he immediately appointed his Minister of Economic Monitoring, Kweronda-Ruhemba, to be in charge of the review exercise. The shareholders met and agreed on a proposal for the re-opening of the bank, which proposal was handed over to the Minister on April 30, 1999. Unfortunately, we have never heard from the Minister or anyone from the Government or Bank of Uganda on this matter.
.Born: January 3, 1947 .Education: B.A Economics Makerere University (1970) .MSC. Development Economics University of strathclyde UK (1972) .MA Mathematical Economics Purdue University USA (1975) . PhD with distinction Boston University USA; specialising in money & finance, development economics and international trade & finance (1979) .Rockefeller Foundation fellow (1974-1979) .Boston University International award for academic excellence and leadership. .King’s college, Buddo award of merit (1996) .Chancellor, Nkumba University (1996) .Honorary Consul, of Indonesia (1997) .Lecturer, Makerere University (1972– 1974) .Lecturer, Boston University (1977 – 1979) .Associate Professor of Economics and Business, United States International University Nairobi with lecture visits to San Diego, London & Mexico campuses (1981-86). .Coordinator Macro-Economic Research for East & Southern Africa International Development .Research Centre (IDRC) of Canada (1983-1986) .Governor, Bank of Uganda (1986 – 1990) .Visiting Associate Professor and Coordinator Master’s Programme in Economic Policy & .Planning Makerere University (1990 – 1992) .Founder member & Managing Director Greenland Bank (1991-1998) .National Chairman, Forum for Democratic Change (2005-2008)