Uganda: Central Bank to Investigate MTN
Wednesday, April 8, 2015
Bank of Uganda (BoU) officials are planning a major investigation into MTN Mobile Money dealings following an expose by The Independent.
A source at the central bank has revealed that the Executive Director Supervision, BoU, under whose docket supervising financial institutions falls, has directed Stanbic Bank to furnish the central bank with details of MTN’s escrow account. This is the account that holds all the deposits made by mobile money agents, who transact in mobile money.
The Independent in Issue 359 of March 13-19 reported extensively on details of a case in which MTN is suing six former employees in the Anti-Corruption Court for allegedly defrauding it of Shs16 billion. MTN also accuses the six of electronic fraud, neglect of duty, unauthorised disclosure, and embezzlement.
Under cross-examination, however, witnesses have revealed questionable dealings by MTN and its staff in regards to transactions on its MTN Mobile Money platform. Among the revelations is one that MTN, by over-drawing its electronic-money account deliberately “creates money” on its Mobile Money platform and that at one point this created money amounted to Shs21 billion which MTN and its staff and agents transacted in, cashed, and benefitted from.
At the time of writing, MTN refused to gives it side of the story on the allegations. However, following publication of the story, MTN issued a statement denying the allegations and described as “inaccurate and deliberately false” the story published by The Independent.
“We wish to clarify that Mobile money platforms do not generate money and to that extent no fake money can be created,” MTN said.