By Andrew Muhimbise
The average Board member of Stanbic Bank Uganda earns 100 million a year inclusive of both sitting allowance and monthly retainer, all paid in dollars. That is for just 12 meetings a year.
The Stanbic bank Uganda has eight board of directors lead by Japheth Katto, -Board Chairman. The other directors are: Kevin Wingfield, Ruth Emunu, Barbara Mulwana, Dr. Samuel Sejjaaka, Dr. Patrick Mangheni, Greg Brackenridge and Eva Kavuma
The Board of Directors is the thinking mind of a company and majority shareholders always aim to have absolute control of the board so they will always pick sometimes intelligent, but docile members who will toe the line when push comes to shove on especially group dealings where there is a parent company. The Stanbic Bank Uganda board has effectively been immunized to represent only her masters the South Africans.
The South Africans’ in a well-orchestrated move slowly moved the Kenyan executives who, coming from a more developed capitalistic nation of this region, were able to reign in on the excesses of the South Africans, ever wondered why the apartheid and its predecessor the Black Economic Empowerment capitalist thinking South African business never thrive in Kenya!! No MTN, Cfc Stanbic is a mid-level lender, Shoprite kicked out of the Kenyan market etc etc! Well Kenyan Executives match them on all parameters and their government understands capitalism as an economic system of balance.
The current Stanbic Bank Uganda board is at best a welfare board; the members basically earn a living from there- notably their joker Chairman. At the Stock Market, it is an open secret as to whom appoints the Stanbic Bank Limited board.
At the purchase of the run-down Uganda Commercial Bank, I.K Kabanda, a younger brother to former President of Uganda Yusuf Kironde Lule, handed over the Chairman reigns to Dr. Martin Aliker a well-connected and savvy corporate player in Uganda and currently President Museveni Advisor.
When Dr Aliker retired, he left the reigns of Chairmanship to one Mr Hannington Karuhanga ‘prodigy’ with links to ‘somewhere’.
Sadly, Mr Hannington Karuhanga was booted off the Bank board unceremoniously on request of Bank of Uganda regarding some credit mess at the Uganda Development Bank (UDB) where his co-Director at Stanbic and Chair of the Internal Audit Committee, the auditing maestro Mr Samuel Sejjaaka also Chairman of UDB and the UDB CEO, a former Stanbic employee.
Technically Mr Karuhanga was fired and in came the newly retired CEO of the Capital Markets Authority (CMA), Securities Exchange Regulator of Uganda) Mr Japheth Katto FCCA.
Mr Katto is a docile safe pair of hands earning more in retirement as Chairman of Stanbic than he did as CMA Head; perfect position as a high earning welfare director who plays along.
Katto is a joker of man, who in his previous life as CMA head was tasked with protecting investors now he looks the other way in typical golf swinging elitist style; his claim to fame as CMA CEO was the energetic blocking of the Kampala City Council football Club from listing shares on the stock exchange to their fan base- I always imagine if he had devoted even half that energy to genuinely growing the capital markets- a legend he would probably be.
Last year Stanbic Bank in wanting to cover up its dividend slump saw Katto go out of his way to reign in the CMA under the leadership of Keth Kalyegira to allow Stanbic Bank contravene rules regarding AGM notice- which was meant to ensure that the shareholders could not be in position to challenge the sudden more than 50% drop in dividend.
He is currently the opposite of what he used to represent the absurdity of what elders exemplify in Uganda today.
Katto has single handedly greatly diminished the quality of the Chairman’s statement in our Annual report, when you read it’s like one written by a rural economics teacher.
Nevertheless you cannot take away his excellent stewardship of the secondary school debate competition that Stanbic Bank sponsors.
I mention these characters so there is an appreciation of the build-up and foundation on why Stanbic Bank which bought UCB under the privatization murky cloud has renegaded on its social contract to the mostly Ugandan and Kenyan shareholders numbering more than 22,000 who have elected to hold shares in what used to be the leading indigenous bank; it’s the least I could do to engender a critical thinker’s mind.
Stanbic Bank Limited listed with a lot of fanfare in 2008 at the Uganda Securities Exchange , with Dr Martin Jerome Oketch Aliker as Chairman, a true champion of dividend and of the Ugandan socio-capitalism business model.
A man who has seen it all having sat on the Diageo Ugandan brewer unit as a 28-year-old just before independence, who regardless speaks his mind even to the big foreign business powers on the need to balance all shareholder benefit, big or small and reigning in on corporate raiding by the multinationals ushered in an a dividend policy of averagely 55% of the net earnings, that was maintained by Hannington Karuhanga who took up his huge boots.
The continued presence of the Kenyans on the Board was helpful that is the beloved Kitili Mbathi (now heading the Kenyan Government tourism body) and Phillip Odera (now heading Cfc Stanbic Kenya).
With Patrick Mweheire firmly in place, all the Kenyan Executives exited and were replaced by the South Africans that we see are returning to the Board to ensure Standard Bank makes as much ‘underhand dividend’ as possible, and that’s why we are here; high income and low official dividend and a depressed Stock Market price
Andrew Muhimbise is a Stanbic Bank Uganda Limited Shareholder, based in Kampala.