BoU Directors Face Arrest Over Payment Of Lawyers Mpanga, Masembe Shs6Bn For Shoddy Work

BoU Directors Face Arrest Over Payment Of Lawyers Mpanga, Masembe Shs6Bn For Shoddy Work

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By Spy Uganda

The State House Anti-corruption Unit headed by Lt. Col. Edith Nakalema is investigating two Bank of Uganda  directors over allegations that they paid Shs6Bn to two city lawyers, under dubious circumstances.

The suspects have been identified as Benedict Ssekabira,  the director Financial Markets Development Coordination (FMDC), and Margaret Kasule, director legal services.

Our Spies at BoU reveal that trouble for Sekabira and Kasule started after they allegedly sanctioned the payment of Shs6Bn to Timothy Masembe Kanyerezi and David Mpanga for purportedly rendering legal services to BoU.

However, it was later discovered that although this money was disbursed as legal fees, its intended purpose was to cover all the legal loopholes in the case involving BoU’s takeover of Crane Bank Limited and its subsequent sale to dfcu bank when it was still under receivership.

It should be noted that the two lawyers represented BoU and payment for their services has been ongoing until parliament’s  Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) unearthed the anomaly as legislators  investigated BoU over the controversial sale of seven commercial banks between 1993 and October 20, 2016.

In December 2017, the Commercial Court disqualified lawyers Masembe and Mpanga from the case BoU had filed on behalf of Crane Bank, alleging that tycoon Sudhir Ruparelia and others had siphoned Sh397Bn from Crane Bank before it went bankrupt, after citing conflict of interest.

Later, in his ruling delivered on December 21, 2017, the head of the commercial court division, Justice Wangutusi stated that David Mpanga of A.F. Mpanga Advocates and Timothy Masembe of MMAKS Advocates acted in violation of the Advocates (Professional Conduct) regulations, because they were initially Crane Bank’s lawyers.

But just last month, BoU allegedly released Shs4Bn as part of the balance on Shs20Bn to be paid to the same lawyers.

However, what is raising the eyebrows of investigators in this matter is why BoU is paying such an exorbitant amount of money to the lawyers yet some of the cases are jointly handled by BoU’s own lawyers and the Central Bank lost most of the cases.

 Insiders thus suspect that the payment could be part of the plot to falsify accountability in the case of Shs478Bn which BoU pumped into Crane Bank a few years prior to its closure.

During his forensic audit of BoU, the Auditor General John Muwanga discovered that officials couldn’t  account for the Shs478Bn was used to recapitalize Crane Bank Limited by BoU.

 The report faulted BoU officials for failing to account for Shs478Bn injected in Crane Bank Limited (CBL) prior to its closure and subsequent sale to dfcu by BoU.

The audit was carried out as ordered by COSASE on December 20, 2018.

 During their meeting with COSASE, BoU officials led by governor Prof. Tumusiime Mutebile, former deputy governor Dr Louis Kasekede and others failed to account for Shs478Bn  which they purportedly spent as liquidity support and other intervention costs on CBL receivership between October 20, 2016 and January 25, 2017.

In his Audit report, Muwanga said that out of Shs478Bn injected into CBL, a total of Shs157.9 Bn had been recovered from dfcu bank and CBL Non-Performing assets, leaving an outstanding balance of Shs320.8Bn at the time of writing the report, which was unaccounted for.

At the time it was sold to dfcu bank at Shs200Bn, CBL only needed about Shs157Bn to remain afloat but BoU couldn’t recapitalize it; they instead opted to sale it to dfcu at a giveaway price.

Our Spies reveal that it is because of the scandals BoU officials are involved in that the State House Anti-Corruption Unit decided to conduct a thorough investigations of the operations of all departmental heads, directors and staff so as to flush out the ‘Kawukumi!’

For instance it is alleged that former executive director in charge of supervision Justine Bagyenda and former deputy governor Kasekende ordered the two directors (Sekabira and Kasule)  to release money to pay the two lawyers for shoddy work.

During his appearance before COSASE, Dr. Kasekende  told Members of Parliament that the money was spent as; telegraphic transfers (TTs) and LC payments, Real Time Gross Settlement (RTGS), clearing and cash requirement requests.

He revealed that an extra Shs12.2Bn was spent on service providers including MMAKS Advocates who were paid about Shs4.2Bn.

However, the latest report on Shs478Bn which BoU allegedly spent on CBL did not audit the Shs12Bn paid by BoU to service providers, reasoning that it was extensively dealt with by the COSASE legislators.

However, our efforts to secure a comment from BoU officials about the matter were futile after their communications officers failed to answer our repeated calls.

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