Kampala- Lawmakers on a House watchdog committee are pushing to have the Governor Bank of Uganda and his team to testify under oath with regard to the payment of billions of shillings to external lawyers in the closure of seven commercial banks.
The MPs on Commissions Statutory Authorities and State Enterprises (Cosase) committee led by their outgoing chairman, Mr Abdul Katuntu, will this month open an inquiry into the alleged mismanagement of closed commercial banks.
Sources close to Cosase said some MPs want the Governor, Mr Emmanuel Tumusiime-Mutebile, and other officials at the Central Bank put under oath because the Auditor General indicated in his recent report to Parliament that some key documents on the closed banks were not given to him.
These include the budget for internal and external operations, list of contracts [with external lawyers], list of all the advocates and total expenditures on hired lawyers.
Mr Mutebile and his team will be asked to provide details on the BoU expenditures on external law firms hired during the liquidation of Teefe Bank (1993), International Credit Bank Ltd (1998), Greenland Bank (1999), The Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and the sale of Crane Bank Ltd (CBL) to dfcu (2016).
For instance, under Global Trust Bank, Cosase will ask Mr Mutebile to explain the payment of Shs409.3m in legal fees. For the expenditures on Crane Bank Ltd, only Shs4b was disclosed as the money BoU used in hiring of two external law firms – MMAKs (Shs3.9b); Cohen and Collins Solicitors and Notaries (Shs17.4m).
The budget for MMAKS Advocates and AF Mpanga Advocates – the external lawyers hired by BoU in Crane Bank case before court kicked them out over conflict of interest, was never disclosed. It is also not clear how much BoU officials spent on external lawyers who handled Greenland Bank and others.
However, Ms Margaret Kaggwa Kasule, the BoU director of legal affairs, said: “The decisions on what cases are handled by the contracted lawyers are taken with a consideration to the “complexity of the matter. That decision is taken by the legal counsel through internal consultation with the lawyers. It depends on the complexity of the matter and a number of other issues.”
Before Cosase halted investigations in September last year, the committee had found from previous AG reports that BoU officials paid Shs1.4b in legal fees to private law firms, despite having a fully-fledged legal department. The MPs have since queried the expenditure and demanded details.
While MPs led by Shadow Attorney General Wilfred Niwagaba (Ndorwa East) want Mr Mutebile to testify under oath before he is allowed to answer any audit queries, Mr Nicholas Opiyo, a lawyer, has, however, warned the legislators against undermining the integrity of Central Bank.
“We have to be careful about how we deal with the Governor of the Central Bank, much more the Central Bank. The only currency on which the bank survives is its integrity and the integrity of its employees… it’s a delicate matter,” he said.
In his counsel to Cosase, Mr Opiyo said: “We must remove any political inclinations from the process and embark on a phased, much needed reform of the Central Bank to guard it from political interference and corruption. The audit process is the start and not the end of that process.”
However, in response, Mr Katuntu described himself as “a professional and a statesman.”
“We are continuing from where we ended last year. We are going to investigate everything in the special audit report of the Auditor General on BoU, including all the payment to external lawyers,” Mr Katuntu said.
“We just paused our investigation into closed banks and payments to external lawyers to allow the Auditor General give us more information. We referred our inquiry into BoU last year. Now that we have the details we wanted, are going to start from where we ended in September 2017.”
He, however, declined to give details on how the committee will handle the inquiry. Sources said next week, Cosase members and representatives from police’s Criminal Investigations Department will have a joint closed-door meeting to discuss and approve the agenda for the BoU inquiry.