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Finance (349)

CID Interrogates 3 DFCU Bank Officials In Hacking Case

The Criminal Investigations Directorate (CID) has reportedly interrogated three Dfcu bank officials in the ongoing hacking case. Over Shs10bn was reportedly lost in a hack that rocked the commercial bank recently.

 Charles Twine, the CID Spokesperson confirmed to Eagle Online that the three officials whose names remain anonymous for now were interrogated a day ago.

“The Dfcu case was formally reported here and investigations are ongoing, he said, adding that, “Some three people were picked, interrogated and released on bond. Because this is a crime that was committed electronically.”

Although Twine declined to reveal how much money was stolen, a forensic audit involving police detectives showed that about Shs10b had illegally been withdrawn from the clients’ accounts.

He also said detectives and their cybercrime team have already picked the logs and are analyzing them to establish how the fraudulent transactions were done. Police said some of the suspects in the crime are not workers of the bank and are actually outside the country.

“They were within the bank and others outside. They gave in their story but with electronic offences we don’t rely on stories. There are people were vigorously looking for and one of them is outside the country. We shall use the normal process to trace for him and bring him back,” Twine said.

Dfcu Bank Admits Fraudsters Hacked Their System

DFCU Bank Monday came out of their closet to confirm media reports that their banking system was hacked and the matter was reported to police to be investigated.

“In May 2019, the Bank detected a case of fraud that was immediately reported to the police (CID HDQTRS GEF 604/2019) and investigations are ongoing,” the bank said in a statement.

“Unfortunately, reports of this incident have been grossly and maliciously misrepresented in an attempt to damage the reputation of the Bank, destabilise the banking sector and the economy in general,” it added.

It is believed and has been widely reported by the media that close to Shs10bn was siphoned out of the bank by the hackers. This money was depositor’s money. One suspect was arrested and released on police bond.

According to a police bond that Eagle Online has seen, one of the suspects is identified as Braise Ombuze and was charged with the offense of Electronic Fraud and Theft under a reference Vide CID HQTRS GEF 604/2019.

Suspect In DFCU Shs10b Hacking Scandal Identified

As DFCU bank’s top administration continues to feign ignorance on the recent heist in which hackers made away with close to Shs10 billion, Eagle Online has some evidence on the matter that has raised eyebrows in Uganda’s banking industry.

According to a police bond that Eagle Online has seen, one of the suspects is identified as Braise Ombuze who was charged with the offense of Electronic Fraud and Theft under a reference Vide CID HQTRS GEF 604/2019.

Braise had been detained at CID head offices in Kibuli Kampala.

The police bond dated June 29 instructs Mr. Braise to appear at Kibuli on July 1, at 10 am for reporting.

“And continue to attend until otherwise directed by court further to answer to the said charge,” the police bond reads in part.

The suspect was bailed out by two sureties, Ambrose Belisya and a one Esther.

Braise is among six suspects who breached DFCU’s system and accessed customers’ information.

$2.6M depositors’ money has since been stolen.

We learnt that the masterminds breached some accounts in Kampala late last month and accessed the cash.

Earlier reports suggested the crime was executed by four junior staff and two outsiders.

Days ago Eagle Online reported that a case was opened at Kibuli CID head offices.

However, detectives handling the matter declined to divulge details to the media insisting there is no case nor suspects in their custody.

Sources had previously said that the hackers first accessed shs 700 million through ATMs.

The hackers cracked the bank’s system and started using “old unauthorized ATM cards” allegedly belonging to a number of pseudo customers “created by these hackers.”

Source: Eagle Online

Sum Hackers Stole From DFCU Bank Now Reported At $2.6m

The money hackers stole from DFCU Bank last month is now being reported at $2.6m rising from the initial figure of Shs700m.

Reports by Trumpet News indicate that this money was accessed using “old unauthorized ATM cards” allegedly belonging to a number of pseudo customers “created by these hackers.”

The online publication quoting sources revealed that Shs700 million was stolen through ATMs while more Shs8 billion was withdrawn from customers’ accounts in many branches across the city.

The heist was masterminded by insiders and outsiders who are well conversant with modern technology used by several banks in Uganda.

“Customers who were involved in the heist were asked to report to the bank that their ATM cards were stolen and therefore these cards were blacklisted by the Bank and issued new ones. But because the system had been compromised, the same ATM were used to withdraw money,” said a source.

This means that the fraud has been ongoing for a longtime in the bank, until the top management learnt of it.

Whereas, DFCU reported the matter to CIID under reference number, CID HDQTRs GEF604/2019, details have been concealed for fear of losing customers.

SOURCE: TrumpetNews

Hackers Hit DFCU Bank Stealing Shs.700M Customers Money

Misfortunes have a found a home in DFCU Bank this year and customers are continuing to suffer. The latest misfortune to hit DFCU Bank is a heist orchestrated by hackers who accessed depositors money amounting to Shs700 million.

According to TrumpetNews, the bank did their best to keep the news of the heist locked away from public domain despite reporting the matter to Criminal Intelligence and Investigation Department (CIID) of police.

“Through our investigations, we have established that the crime was executed by four junior staff and two outsiders who have since been arrested and are currently in police custody,” TrumpetNews reported.

“The heist occurred two weeks ago but DFCU has kept it a top notch secret for fear of losing clients should the public learn that the customers’ details were compromised.

According to a source in the Bank, the hackers penetrated DFCU’s system in most of the branches in Kampala and withdrew Shs700 million which they shared amongst themselves.

The head of communications at DFCU Rukh-Shana Namuyimba when contacted said she wasn’t aware of any hacking. “I am not in position to comment because I am not aware of that,” she said.

Government To Take Action Against BoU For Misdeeds – Finance Minister

Government is set to take action on the recommendations of the probe report into Bank of Uganda (BoU) operations, the Minister of Finance, Mr Matia Kasaija, told Daily Monitor in an interview.

The Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) chaired by Mr Abdu Katuntu made the recommendations more than four months ago after months of quizzing BoU top management over the closure of seven commercial banks.

Mr Kasaija told Daily Monitor that after Parliament adopted the Cosase report, he tasked the central bank to examine the findings and recommendations and make a report showing what actions they would take internally.

He said BoU sent him a report and the ministry is now ready to take action.

“We are moving, but I cannot give you the whole detail. We have received a report from Bank of Uganda showing the actions they have taken. But I cannot give you details on these actions too. The report was sent to me about three days ago,” Mr Kasaija said in a telephone interview.

At the time Parliament debated the report, the Prime Minister, Dr Ruhakana Rugunda, said government would take serious action on the several inconsistencies in BoU’s closure of commercial banks.

SOURCE: Daily Monitor

Lawyers Ask Court To Dismiss BoU Case Against Businessman

Lawyers representing businessman Sudhir Ruparelia have objected to the case in which the Crane Bank (under receivership) and Bank of Uganda (BoU) sued Sudhir for allegedly fleecing his own bank (Crane Bank) of Shs397 billion in fraudulent transactions.

The lawyers of Kampala Associated Advocates Wednesday presented a preliminary objection against the Bank of Uganda case before the Commercial Court judge David Wangutusi.

The lawyers led by Peter Kabatsi argue that an institution in receivership has no right to sue or be sued since the Financial Institutions Act (FIA) which is a financial governing body does not say so.

“When dissolving a bank, BoU had three options. It can put someone in management in what is called statutory management, receivership or liquidation and it chose to go for receivership. Under the law, specifically, only the manager and the liquidator can sue. The case cannot be filed by a receiver,” said Ellyson Karuhanga, one of the lawyers representing Sudhir.

He explained that under the law, BOU has four functions to dissolve and not selling the financial institutions.

“The receiver cannot be sued on that act and cannot sue anyone. His action is protected by the law. The second point we are raising is that the receivership is limited by time, the law gives the receiver 12 months to carry out its function and after this, he cannot do anything,” Karuhanga argued.

On the contrary, Crane Bank in receivership lawyer led by Dr Joseph Byamugisha, submitted that when a financial institution is placed under receivership, it does not also lose its powers to sue or be sued since it still remains a corporate entity.

In May 2019, Sudhir Ruparelia and Meera Investments lodged an application seeking court to dismiss a suit in which CBL in receivership sued the two applicants yet it had no legal capacity to do so.

Court has set 26 of August as the date when Commercial Court judge, Justice David Wangutusi, will give a ruling in the case brought against city businessman Sudhir Ruparelia by Crane Bank in receivership.

MP Considering Bill To Clip Mutebile’s Powers

The Member of Parliament (MP) for Igara East Constituency, Michael Mawanda, says he is preparing to move a motion in parliament to enact a private member’s bill that will limit the powers of Bank of Uganda (BoU) governor.

According to Mawanda, the “Bank of Uganda Amendment Bill 2019” is aimed at addressing the current scandals at the central bank, adding that it would further protect the falling economy.

Mawanda’s impending bill is in line with recommendations made in February 2019 by the parliament’s committee on Commissions, Statutory Authorities and State Enterprises [COSASE] after probing BoU on the controversial closure of seven commercial banks, including Crane Bank Limited in 2016 and Global Trust Bank Uganda in 2014.

During the COSASE probe, led by MP Abdu Katuntu as Chairperson, it was established that Prof. Emmanuel Tumusiime-Mutebile the BoU Governor reports to himself since he chairs the BoU Board and this is worsened by the fact that his deputy Dr. Louis Kasekende is the Vice Chairman of the board.

Mawanda believes his bill will restore order, credibility and public trust that has since been lost thanks to the Governor Prof Emmanuel Mutebile and his deputy Louis Kasekende-led administration. It was made worse when a confidential Presidential Tripartite Committee report revealed that Tumusiime-Mutebile in March 2018 hired top officials in disregard of the BoU Act.

Katuntu Calls For Mutebile, Kasekende Sacking

The former Chairman of Parliament’s Committee on Commissions Statutory Authorities and State Enterprises Abdu Katuntu has warned of serious repercussions if the governance issues between Central Bank governor Emmanuel Tumusiime Mutebile and his deputy Dr. Louis Kasendende are not solved.

Katuntu who chaired the Cosase committee that investigated and unearthed a rot at Bank of Uganda told MPs that a succession battle for the top position is the reason for day today scandals that are continuing to rock the institution.

The Bugweri County MP who called for an immediate swoop at BoU claimed that currently there are two factions at the central bank one led by the governor Emanuel Mutebile and another by his deputy Dr Louis Kasekende.

“If this fight amongst the factions is not stopped, be ready for serious repercussions,” he warned before entirely rejecting a government statement on the ongoing investigations at BoU presented by state Minister for economic planning David Bahati.

“It may lead to the collapse of the central bank if issues of governance are not hurriedly handled,” he added.

After poking holes into government statement, he then wondered why other agencies including the United Nations and businessmen have failed to respond to claims that they had some cargo on the chartered plane in question.

Katuntu while still the Cosase boss, his Committee noted a number of inconsistencies key among them, the declining performance of the Central Bank, closure and sale of the defunct Banks without any inventory or documentation and grossly undermining the legal procedures of bank closure by the Central Bank.

Speaker Rebecca Kadaga who chaired Parliamentary sitting on Tuesday June 25, gave government up to July 15 to produce a preliminary report into the currency scandal.

SOURCE: PML Daily

Museveni Probe Committee Calls For Review Of BoU Staff Recruitment Process

Several staff at Bank of Uganda could lose their jobs after a probe committee recommended that the Central Bank Board of Directors should review the circumstances under which some were recruited and others promoted by Governor Emmanuel Tumusiime Mutebile in February this year.

Some of the senior staff appointed by Mr Mutebile following the February 7 memo are Dr Twinemanzi Tumubweine, Executive Director Supervision;  Ms Valentine Ojangole, Director Banking; Mr Edward Mugerwa, Director IT Operations, Ms Ruth Kande Sabiiti, Procurement Assurance Manager and Dr Natamba Bazinzi, Assistant Director Currency Administration.

The aggrieved BoU staff had in their memo to the IGG, said the appointment of the above staff was irregular and centred on tribal and religious sentiments.

And now the committee, which was formed by President Museveni in February following concerns about Mr Mutebile’s sweeping staff changes, has recommended that  that the Board of Directors reviews all promotions effected on 7th February 2018 and rectify the departure from the standing policy on recruitments as contained in the Administration Manual and highlighted in this report.

“The Committee further recommends that the Board causes a Human Resource Audit of all existing staff of the Bank with a view to ascertaining how many staff have accessed the bank outside of required procedures and to take demonstrable measures to guard against recurrence of such cases,” the report reads in part.

The recommendations come after the committee concluded that the recruited or promoted staff lacked the requirements to work in the central bank, ranging from academic qualifications to years of experience.

The committee report also pins the Governor on disregarding the existing administration manual at the bank and acting individually in making the appointments which triggered a petition by aggrieved BoU staff to the IGG.

In their findings, the committee said they established that while Mr Mutebile explained that these staffs were recruited in special circumstances (headhunted), he disregarded Section 4.3.4.2.1 of the Administration Manual which provides that the Bank shall maintain the minimum requirements for both internal and external recruitment into the Bank as First Class or Upper Second honours degree.

The Committee recommends that the ratification of the appointment of externally recruited persons should be handled by the Board of Directors as per their mandate under the Administration Manual and the Constitution.

“However, due to the prevailing situation characterized by suspicion and mistrust in the bank and in the interests of ensuring that any decision in this regard is free of any perception of bias, the Committee also recommends that the ratification by the Board should involve an independent professional firm that is familiar with recruitment processes. This firm would be expected to verify the qualifications and competencies of the externally recruited persons against the official bank requirements and present a report to the Board. This firm could be sourced through the Ministry of Finance, Planning and Economic Development to ensure freedom from the perception of bias and guard the integrity of the process,” the report adds.

The Committee recommends that Bank of Uganda urgently review its internal grievance management procedures with a view to restoring trust and confidence among staff in the management of the bank.

“As highlighted in this report, there is distrust among staff about the grievance processes and this has led staff to mostly depend on rumours and talk in the corridors of the bank,’ the report says.

The Committee also recommends that the Board of Bank of Uganda undertake benchmarking study tours of counterpart central banks particularly in Kenya and South Africa in order to determine the applicability of some corporate governance best practices in the respective jurisdictions to the Ugandan context.

“This is because as observed from the benchmarking visits conducted by the Committee there are some good examples in terms of best practice which may serve to address some of the governance problems at the Bank of Uganda. This is particularly necessary with regard to corporate best practice in terms of ethical governance practices and procedures for the Board of Directors,” the report adds.

The committee said they established that while Mr Mutebile explained that these staffs were recruited in special circumstances (headhunted), he disregarded

Section 4.3.4.2.1 of the Administration Manual which provides that the Bank shall maintain the minimum requirements for both internal and external recruitment into the Bank as First Class or Upper Second honours degree.

This was by appointing the staff who did not meet the minimum entry requirements.

The report adds that while Dr Tumubweine had the basic academic requirement of a PhD, he lacked experience and had a pass degree.

It was determined from Dr. Tumubweine’s personal file that he holds a PhD in Economics from the University of Texas in Dallas, United States of America (December 2009), a Master of Science degree in Economics from the University of Texas in Dallas, United States of America(December 2009), a Master of Science Degree in Management and Administrative Sciences from the University of Texas in Dallas, United States of America (May 2004) and a Bachelor of Science Degree in Statistics and Applied Economics from Makerere University in Kampala, Uganda (January 1996).

“When Dr. Tumubweine’s academic qualifications were considered alongside the prescribed requirements stipulated by the policy in the Administration Manual, it was found that his first degree was a pass degree. It, therefore, fell below the standard requirement of 1st Class and Upper Second Honours and also below the standard set for exceptional circumstances which is Lower Second Honours degree.

It is also pertinent to note that Dr. Twinemanzi lacked experience in commercial banking as stipulated in the job description for Executive Director Supervision. There was no mention of any working experience relevant to commercial banking in his personal records at the bank,” the report adds.

For Mr Mugerwa, the Director IT Operations, the report indicates that he is a holder of one degree being a Bachelor of Science (Bsc) in Electrical Engineering obtained from Makerere University in Kampala, Uganda in 2000. He passed with Upper Second Class Honours and as such fell within the minimum requirements for entering the Bank of Uganda.

However, with regard to the official Bank job description, the report shows that Mr. Mugerwa lacked the minimum requirement of a Masters degree in Computer Science/Engineering, Information Systems/Technology or closely related field. His personal records revealed that he only possessed a Bachelors degree, the report adds.

For Ms Sabiiti, Procurement Assurance Manager, she was found to be a holder of one degree being a Bachelor of Arts in Social Sciences (Economics and Political Science) obtained in 1996 from Makerere University in Kampala, Uganda in 1996. It was determined from her degree transcript that she held a basic pass degree with no honours.

“This was clearly outside the minimum requirement of Upper Second Honours for normal recruitment and that of Lower Second Honours for recruitment under exceptional circumstances,” the report adds.

For Dr Bazinzi, Assistant Director of Currency Administration, he was found to hold the following academic qualifications: Doctor of Philosophy (Business Management – Finance) obtained from Moi University in Kenya – 2016; Master of Science (Msc) Accounting and Finance – Makerere University in Kampala, Uganda – 2010 and Bachelor of Business Administration – Makerere University Kampala – 2006

The committee indicates that Dr. Bazinzi’s academic transcript for his Bachelor’s degree showed that he graduated with Upper Second Honours and therefore met the minimum recruitment requirement for Banking Officers. However, it adds that close analysis of his working experience and the official job description for an Assistant Director Currency revealed a variation.

“Whereas The job description called for at least 5 years working experience in a financial institution with at least 2 years in the management of currency operations or at least two years as Head of Section in Bank of Uganda his personal records revealed no relevant experience in light of the position he was offered,” the report says.

“Bazinzi lacked the working experience of at least five years in a financial institution with at least two years in management of currency operations or at least two years as Head of Section in Bank of Uganda as stipulated in the official Bank Job Reference CD2.01. According to his CV, Natamba Bazinzi’s experience is largely as an academic and a consultant and he had never worked in a financial institution by the time he was recruited into the Bank. This therefore also begged the question as to what the Governor based himself upon to determine that Bazinzi merited recruitment through headhunting,” the report adds.

The report indicates that while the externally recruited staff all were deemed to have been headhunted, none had had clear evidence to prove that they had been formally approached by the Bank and invited to apply for positions.

For Dr. Bazinzi, the report indicates his personal file showed that he tendered an application for a position in the currency department to the Governor on 18th October 2017.

“According to his testimony he solicited the job and not the other way round,” the report states.

For Dr Tumubweine, the report indicates that there seemed to be persons outside the Bank influencing his appointment.

In Ms. Sabiiti’s case, the report indicates that as much as the Governor claimed to have headhunted her, she stated to the Committee that she had previously submitted an application to the Bank in light of gaps she had identified in procurement and disposal. She then informed the Committee that she had been contacted by the Human Resource Department after the Governor had communicated her appointment on 7th February 2018.

The report states that in all cases the Governor received and unilaterally approved requests from the externally recruited staff to be granted permanent and pensionable status.

“This was in spite of the fact that he claimed that his decision was subject to ratification of the Board of Directors. As much as he made reference to ratification the Board of Directors when appearing, no such reference was evident in the memo of 7th February 2018 and the appointment letters of all the externally recruited staff,” the report adds.

Contrary to the explanation of the Governor, the report states that the procedure that he adopted in the recruitment of five staff from outside the Bank was completely inconsistent with the Bank policy on headhunting and bore no resemblance to any other recruitment process provided in the manual.

All five staff externally recruited by the Governor were therefore recruited outside of the known policies and procedures for recruitment at the Bank.

 

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