MPs Grill Bank of Uganda Over Shs 140 Billion Haba Group Loan Default

Members of Parliament sitting on the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) have expressed strong dissatisfaction with the Bank of Uganda (BoU) over its apparent lack of progress in recovering a substantial Shs 140.487 billion. This amount is linked to a loan guarantee issued to Haba Group Ltd almost nine years ago, following instructions from the Ministry of Finance.

The committee has formally requested comprehensive documentation from the central bank, detailing the issuance of the guarantee, any due diligence performed, recovery efforts, and communications with the Ministry of Finance. The significant sum stems from a controversial compensation deal involving businessman Hassan Bassajjabalaba and his companies, related to cancelled market leases in Kampala.

Appearing before Cosase, BoU officials faced intense questioning about the prolonged delay in recovery. It was revealed that the central bank had not directly engaged Haba Group or initiated any legal action. BoU’s head of legal, Dorothy Masifa Ochola, admitted that recovery efforts had largely consisted of correspondence with the Ministry of Finance and consultations with external lawyers.

This admission sparked anger among MPs, who questioned why nearly a decade had passed without concrete steps to reclaim the public funds. Further concerns were raised about BoU’s failure to secure any collateral from Haba Group before issuing the guarantee and the inability of BoU officials to readily provide details on the company’s current directors and shareholders.

Cosase Chairperson Muwada Nkunyingi stressed that BoU, as a corporate entity, holds responsibility for safeguarding public funds. The committee also sought clarification on who ultimately benefited from the funds and who bears the responsibility for repayment, noting what appeared to be conflicting explanations from BoU representatives.

Governor Michael Atingi-Ego acknowledged the matter and requested more time to compile a detailed written response, noting previous examinations by prior committees. However, Cosase postponed the engagement, directing BoU to return with all requested documentation. The committee also plans to summon representatives from Haba Group for their perspective.

https://observer.ug/news/mps-fault-bank-of-uganda-over-failure-to-recover-shs-140bn-from-haba-group