Uganda: Court halts takeover of PM Amama’s bank

By ANTHONY WESAKA

IN SUMMARY: Managing director Nzeyi asks court to block central bank from assuming control of NBC.

KAMPALA

The Constitutional Court on Friday evening blocked the takeover of the management of National Bank of Commerce (NBC) until the substantive application challenging the same is heard and disposed of in three months’ time.

In an unprecedented move, Bank of Uganda through its deputy governor Dr Louis Kasekende, this week took over the management of NBC, saying the continuation of its activities is detrimental to the interests of depositors. But being dissatisfied with this move, Mr Humphrey Nzeyi, the director of NBC and a son to one of the majority shareholders and businessman Amos Nzeyi, asked the Constitutional Court to halt the takeover process citing among others not being heard before the Central Bank took its decision to wind up the bank.

BoU had said in a press statement that NBC depositors will operate their accounts in Crane Bank. And by close of business on Friday, Crane Bank had implemented the process, calling on NBC customers to continue transacting business through its branches and to pick their ATM cards from its offices starting tomorrow.

Interim order

“An order does issue against the respondents (Bank of Uganda and the Attorney General) or employees or agents from implementation of the winding up order of the affairs of NBC issued in the first respondents’ public notice and correspondences suspending the Managing Director of NBC dated September 27 and any other sale of NBC pending the disposal of the main application,” read the interim order.

The interim order was issued by Justice Steven Kavuma in the presence of Nzeyi’s three lawyers. It will stay in force for three months. Mr Muwema, said they are working to have the interim order served to Bank of Uganda so that their intended takeover does not happen on Monday. “We are serving the interim orders on to Crane Bank this morning (Sartuday). BoU does not work on weekends but by all means, we shall also serve them by close of business today,” said Mr Muwema.

The respondents to this application who included BoU and the Attorney General were not represented in court as the matter was treated as urgent since the Central Bank was set to effect its takeover of NBC tomorrow.

The implication of this order is that the status quo of NBC remains by carrying on with its financial operations for the next three months until when the substantive application is heard and determined.

Justice Kavuma also directed the registrar of the court, Mr Erias Kisawuzi ,to expeditiously have the main application of this matter heard and determined. Mr Kisawuzi told this newspaper yesterday: “I will on Monday fix a hearing date for this matter.”

Shareholders

The other majority shareholders of NBC include; Prime Minister Amama Mbabazi and ICT minister Ruhakana Rugunda. The trio shares 86 per cent of the bank shares with the remaining 14 per cent owned by 320 other investors including former Finance Minister Ezra Suruma, Maj. Gen. Jim Muhwezi and retired Supreme Court Justice George Wilson Kanyeihamba.

Source: Sunday Monitor (30/09/2012): http://www.monitor.co.ug/News/National/Court+halts+takeover+of+PM+Amama+s+bank/-/688334/1520960/-/nchg9mz/-/index.html