MPs Criticise UCBL Audit

By John OdyekMPs yesterday said there was a conflict of interest for the accounting firm KPMG to audit the accounts of Uganda Commercial Bank Ltd (UCBL) and do the business evaluation for its privatisation.The MPs expressed shock on learning that KPMG Kenya did the business evaluation of UCBL while KPMG Uganda did the audit report. Senior officials of KPMG Uganda appeared before the parliamentary adhoc committee investigating the sale of UCBL to the South African Stanbic Bank. John Kiruthu, a senior KPMG Uganda partner said the Uganda firm received US$50,000 for the business evaluation on behalf of their Kenyan partners, saying it was their practice to do so. He told MPs that KPMG Kenya was selected by Bank of Uganda and not through a bidding process. However, the lead counsel Abdu Katuntu (Bugweri) said he believed KPMG Uganda did both the audit reports and business evaluations for UCBL. “You said KPMG Kenya are not registered accountants here. It would be illegal if they did the reports or it would a conflict of interest,” he said.Fred Omach (Jonam) said the business valuation report was presented as a draft and queried whether it could be treated as a legal document.Jeroham Tesiga, the UCBL internal audit general manager, said at the time of the sale of UCBL to Stanbic Bank, sh8.5b was transferred from UCBL to Bank of Uganda. He said this reduced the profit of the bank from sh24b to about sh15b at the end of last year. He said he didn’t know what the transfer was for.Ends