By Aggrey Baba
City businessman Hassan Basajjabalaba on Wednesday challenged the emerging Bank of Uganda (BoU) narrative over the UGX 140.487 billion Haba Group exposure, telling Muwada Nkunyingi-led COSASE that he did not approach the bank seeking a personal guarantee for his business. Access full video of Basajjabalaba’s COSASE interface via this YouTube link: https://www.youtube.com/watch?v=mfD8ojBtf5A
Instead, Basajjabalaba told MPs that BoU became involved after Government and his companies entered into a series of compensation-related arrangements. His account directly touches one of the questions COSASE has been asking BoU, of why did the central bank become responsible for a private company’s financial obligations in the first place?
When BoU appeared before the committee earlier this month, officials said the UGX 140.487 billion exposure arose from guarantees connected to Basajjabalaba’s Haba Group and that the transaction followed instructions from the Ministry of Finance. The central bank has since been pressed to explain why the money has remained unrecovered since 2017.
But Basajjabalaba told MPs on Wednesday, that the arrangement cannot be understood as though he simply went to BoU and requested a Government-backed loan.
He linked the financing to compensation claims arising from cancelled arrangements involving city properties. He also told the committee that he had been dealing with Government before BoU entered the picture.
That testimony puts pressure on COSASE to reconstruct the transaction from the beginning rather than starting with the UGX140 billion outstanding today.
The committee will have to establish who initiated the arrangement, who instructed BoU, what documents were signed, what security was provided, which commercial banks received the money and what obligation ultimately remained with Haba Group.
The question of security is particularly important, because during the earlier BoU COSASE appearance, MPs questioned what guarantees or collateral existed for the loan and why recovery had taken so long.
But Basajjabalaba’s Wednesday testimony gives COSASE another line of inquiry, on whether the central bank was acting primarily as a lender, guarantor, Government agent or as part of a compensation mechanism.
The committee has not yet made a finding on any of those competing accounts. But after weeks of hearing lawyers and BoU officials, COSASE finally had Basajjabalaba himself in the room. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
