Finance

Finance (191)

Bagyenda Lied About Not Having Minutes Of Meeting With Kirkland Lawyers

Justine Bagyenda's claim that Bank of Uganda kept no minutes of meeting that resulted into the closure of three commercial banks has been trashed by a layer from J.N Kirkland and Associates called Kakembo Katende. Bank of Uganda hired the law firm in 2007 as transactional advisors and to implement an exit strategy for three banks. 

Kakembo told parliamentary committee on commissions, statutory authorities and state enterprises (COSASE) which is investigating the improper sale and closure of seven commercial banks that the central bank took minutes every time they engaged them on the closure of the banks.  

The three commercial banks in question are International Credit Bank, Cooperative Bank and Greenland Bank. These are just part of the seven commercial banks which went down under the wrath of the central bank since 1993; the latest being Crane Bank which was taken over by the central in 2016 and later controversially sold to DFCU Bank in 2017.

An audit by the auditor general highlighted irregularities in the closure of these seven bank recommending that parliament's cosase investigates and brings Bank of Uganda to book.

Kakembo told a cosase probe meeting chaired by Bukedea Woman MP Anita Among that all the time they attended meetings at BoU in the supervision department, there was an attendance book which they had to sign, always.

"The people from BoU were the recordkeepers of those discussions. I do not have minutes, but we recorded our appearances and most of these meetings were chaired by Bagyenda," Kakembo told cosase.

Beatrice Anywar then asked Dr. Tumubwine Twinemanzi, who replaced as executive director supervision, whether they had the said minutes of the engagements with Kirkland Advocates, Twinemanzi referred the question to Bagyenda to which Bagyenda said: "My memory cannot serve me right on that. Madam Chair, that was 2007 and we are in 2019, i cannot recall."

More Trouble For BoU As FDC, Kadaga Agree To Let Katuntu Finish COSASE Banks Probe

Bank of Uganda will continue to face the wrath of Abdu Katuntu and his colleagues with whom they make up the parliamentary Committee of Commissions, Statutory Authorities and State Enterprises (COSASE).

This comes after the speaker of parliament Alitwala Rebecca Kadaga and leading opposition political party Forum for Democratic Change (FDC) reaching an agreement on Tuesday to let Katuntu lead the committee as chair.

The FDC’s had earlier objected to the extension of Katuntu’s tenure after it expired on January 13, 2019 yet Speaker wanted it extended to allow the old leadership complete Bank of Uganda (BoU) probe over the controversial closure of seven defunct banks.

Katuntu was late last year replaced by FDC with Kawempe South MP, Mubarak Munyagwa and deputized by Rubaga North MP, Moses Kasibante. However Katuntu and Kadaga didn’t yield to the pressure from the opposition politicians going on to chair the only cosase-BoU probe meeting last week.

Leader of Opposition, Betty Aol told journalists that the two sides had come to an agreement and the meeting scheduled between COSASE and former owners of closed banks was to go ahead, which hinted at the fact that Katuntu was to continue with the probe.

“We have finished our dialogue and speaker will be the one to make the pronouncements. We tried to explore a lot of options so the best option will be announced by her on the floor of Parliament in the plenary, I believe it will be tomorrow because today, she has also been busy and we have also been busy in Commission’s meeting,” Aol said.

She however remained tight lipped on details of the meeting asking journalists to wait until Wednesday afternoon when Speaker would make the official announcement.

Sources privy to the discussions of the meeting showed that the two sides agreed to have the Katuntu team carry on the Bank of Uganda probe until the 15th  February as opposed to the 20th  February 2019 that had been earlier announced late last year by the Speaker.

COSASE is investigating the alleged improper closure of seven commercial banks by Bank of Uganda between 1993 and 2017 following a recommendation by the auditor general in a report after he found irregularities in the banking sector attributed to mismanagement at the central bank.

COSASE Inquiry Continues To Expose Bank Of Uganda Weakness

When the Bank of Uganda (BoU) started closing commercial banks right from 1993 on account of insolvency, the officials there did not at any one time anticipate they would face a parliamentary probe for their actions, for they thought the central bank was independent and could do its business causally without following the established laws and procedures.

That long-held view by the BoU senior staff was to change when some of the owners of the closed banks started complaining of the unfair closure of their branches, even as they pleaded that they be given second chance. Particularly the sale of Crane Bank (CBL)in January 2017 put BoU in disrepute to the extent that parliament ordered the Auditor General John Muwanga to carry out a special audit on the closure of seven banks by BoU. BoU would later resist Muwanga’s probe but later gave in after failing to garner support from the executive.

Muwanga’s well written audit report formed the basis on which the Parliamentary Committee on Commissions, State Authorities and State Enterprises (COSASE) are probing BoU senior staff as the MPs seek answers to the queries raised in the report. The report was published on August 27, 2018 and handed over to the Speaker of Parliament Rebecca Kadaga.

Mr. Muwanga’s report on closure of banks and COSASE’s inquiry have been commended by the members of the public who have been watching the proceedings live on television. The inquiry has exposed BoU as an institution that doesn’t follow its own procedures. It exposed BoU staff as disorgainsed, uncoordinated, negligent, careless and not suitable to hold those jobs, despite having the qualifications. For instance, the inquiry exposed director legal department, Margaret Kasule, as wanting as she could not appropriately respond to questions relating to closure and sale of banks.

The inquiry further has exposed BoU staff as exhibiting corruption tendencies as well as allowing conflict of interest in the transaction. For instance the inquiry established that BoU sold Global Trust Bank Uganda (GTBU) and CBL to Dfcu Bank well knowing that BoU Staff retirement benefit scheme owns 0.59 shares in Dfcu Bank and as such stood to benefit from the two transactions. The MPs in the probe have established that that was foul play, which was accepted by BoU Governor Emmanuel Tumusiime-Mutebile.

Further, the probe has exposed BoU in the conflict of interest scenario. For instance, Dr. William Kalema was both on the boards of BoU and DFCU Bank when the latter bought GTBU. That is the reason why MPs on COSASE dismissed him from appearing alongside BoU staff in the inquiry. BoU has conceded defeat on this, saying it will never happen again, but the damage is already done.

BoU has been further exposed in that it did business with law firms whose directors represent the banks the central banks is supposed to regulate. For instance some of the MMAKS Advocates counsels are directors in some commercial banks. Sebalu & Lule Advocates have had business with BoU, the latter well knowing they did the same with CBL. That raises a question whether BoU can effectively do its regulatory work in such a scenario. The same layers at one time worked for CBL.

The inquiry has still exposed BoU as an institution a careless officials. For instance the Auditor General hired KPMG to produce a financial status report of CBL under receivership but responsible BoU officials did not sign on the report, leaving it hanging. The BoU staff were exposed as careless as they claimed to have spent Shs478.8 billion on CBL in liquidity support yet they cannot account for the money. Interestingly to show their carelessness they sold CBL at Shs200 billion, paid in installments. That is worsened that the bank doesn’t have all documents related to the transaction as they sold banks.

Mutebile recently accepted the faults committed by BoU as it closed banks. “I would like to thank you in particular, for your candid approach to tackling issues that you believe needed to have been addressed, or at least taken into consideration by the staff of the Bank of Uganda. I also would like to express my appreciation to the Auditor General for his report which raised issues that will culminate in an improvement in the operations of Bank of Uganda,” he told MPs on COSASE.

“The Bank of Uganda acknowledges the relevance of this exercise and we are confident that it will enhance transparency and accountability, which are key values that the Bank upholds. This interaction has highlighted the shortfalls within our processes, policies and practices,” he said, adding that the MPs probe had been a learning process not only for the Management but also for the staff. “I am confident that resulting from this process, we will review ourselves, the Banks processes and policies in order to strengthen our capacity to perform the functions of the Central Bank better,” he said.

He said it would be incumbent upon BoU to put in place measures that translate into a stronger institution and visibly boost the confidence of the public in the central Bank. “We want to see a stronger financial sector and economy built on the confidence that the public has in us,” he said.      

SOURCE: EAGLE ONLINE

Why Court Ordered Dfcu Bank To Pay Former Crane Bank Employee

Dfcu Bank will pay Shs62 million to Mr. Shakil Pathan Ismail, a former employee of the defunct Crane Bank Limited (CBL), the Head of the Commercial Court, Justice David Wangutusi has on January 15, 2019 ruled. Mr. Shakil will also get general damages worth Shs20 million.

The special damages come with 21 per cent interest per annum from April 2016 on till payment is made in full. The judge also ordered the bank pays a further 6 per cent interest on damages from the date of judgement till the amount is fully paid.

The judge also ruled that Dfcu Bank meets the costs of the suit that has further tainted the image of the bank in the eyes of the public. The bank continues to be in the news for acquiring CBL and Global Trust Bank controversially. Former workers of CBL are also in the process of demanding compensation from Dfcu Bank for terminating their services in violation of an earlier agreement.

In 2017, Mr. Shakil sued Dfcu Bank for the recovery of Shs62 million which he said the bank unlawfully blocked/deducted from his salary account. That happened after Dfcu Bank bought off CBL on January 25, 2017.

“It is without doubt that the defendant kept the plaintiff (Shakil) out of use of his money. The bank must have used this money for commercial purposes. It is also without doubt that if the plaintiff had borrowed that money from the bank, he would have paid it back at commercial interest rate. What is good for the goose should also be good for the gander,” Wangutusi said in a written judgement.

DfcuBank used MMAKS Advocates in the said suit praying that court allows it to add on CBL in receivership as the second defendant, but the judge dismissed it, saying MMAKS Advocates had once served CBL and now could not be allowed to turn against the same bank as ruled in; Bank of Uganda Vs Crane Bank Civil Suit No.493 of 2017.

MMAKS is forbidden from representing any entity against Crane Bank, secondly Dfcu as a successor of Crane Bank can suffer all all all the previous liabilities inherited from Crane Bank provided the victims of these liabilities were never privy to the purchase of Crane Bank asserts and liabilities.

“It did not matter whether the firm had many lawyers and the one now assigned with the new matter did not personally handle the complainant’s case. Conflict would still be imputed from the “Canteen factor”, he said.

“Canteen factor is this case included social chat between colleagues or with client that gave vital information so if the interaction is between one of the partners it will be imputed to the others,” he explained.

The judgment was delivered in the presence of Mr. Timothy Lugayizi-Dfcu Bank counsel and Ms Daphne Atuhaire-assistant to Mr. Nelson Walusimbi, Counsel for Mr. Shakil.

SOURCE: EAGLE ONLINE

MMAKS Advocates Denies Aiding Bagyenda Steal BoU Docs Despite Meeting

MMAKS Advocates has denied helping former Bank of Uganda (BoU) executive director in charge of supervision Justine Bagyenda ‘steal’ vital documents from the central on 10th February, 2018 despite holding a meeting with her on Sunday 4th February, 2018

Bagyenda together with her body guard are seen in a leaked video sneaking out vital documents without BoU security clearance. In the same video lawyer Timothy Masembe of MMAKS is seen allegedly from a meeting with Bagyenda. Earlier reports indicated that Masembe as a lawyer guided Bagyenda. The law firm has since issued a statement denied the allegations.

Moses J. Adriko, a Partner at the law firm, in a press statement said the video was created to cause an impression that “one of our Partners, Mr. Timothy Masembe, was present on the date and at the time that Mrs. Justine Bagyenda allegedly took documents out of Bank of Uganda (BOU) which is untrue.”

The statement further says that while it is true that Masembe indeed attended a meeting at BoU on Sunday 4th February, he was not physically present at BoU on 10th February 2018 when Bagyenda, is shown on camera removing documents from her office at BoU with the help of Juliet Adikot and Job Turyahabwe- Bagyenda’s body guard and driver respectively.

These documents are now believed to be the much-sought after records, correspondences, internal memos, agreements and minutes of several meetings; that both the Auditor General and COSASE have unsuccessfully tried to obtain from Bank of Uganda. These documents are believed to contain critical and valuable clues regarding who played what role in what has now become a multibillion scandal at the central bank.

Since the BoU scandal broke, MMAKS has been mentioned several times and almost all of them in unpleasant shadowy circumstances; this is yet another coincidence too many.

 SOURCE: kyamutetera.com

CCTV Footage Showing Bagyenda ‘Stealing’ BoU Documents Leaks

A video footage incriminating former Bank of Uganda Executive Director in charge of Commercial Bank supervision Justine Bagyenda appearing to be smuggling vital documents out of the central Bank has emerged.

 The CCTV footage that was provided to the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) by BoU’s Security Director Milton Opio Orech showed Bagyenda and her bodyguard Juliet Adikolet, using an emergency exit to smuggle the documents out of the bank.

When asked what the documents contained, Bagyenda’s bodyguard told the committee that she had no idea what she was carrying and Bagyenda claimed they were personal gifts and a hand over report from Pretoria in South Africa.

A second video clip showed two cars accessing the BoU premises on a non-working day, a Sunday afternoon, with the individuals proceeding to head to Bagyenda’s office yet they had not been checked.

 

“We are supposed to register all vehicles that come to the bank, but this wasn’t registered. The person came without clearance and the car came in without clearance,” Orech told the committee.

Asked by the committee to identify the individuals, Bagyenda’s bodyguard Adikolet said the question should be directed to Bagyenda who was present, but on MPs’ insistence, she identified MMAKS Advocates lawyer Timothy Kanyerezi Masembe.

Bagyenda identified the second individual as Ashrin Kumar the Managing Director of Bank of Baroda. 

Masembe was one of the lawyers who were contracted by BoU during the sale of Crane Bank. The COSASE committee had on the previous day heard that the law firm had received Shs914m from BoU to handle the Crane Bank sale without terms of reference.

Bagyenda Admits She Sneaked Documents Out Of BoU

The former Bank of Uganda Director for Supervision, Justine Bagyenda has told the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) that the three bags that her driver and bodyguard took out of the Central Bank’s premises without security checks only contained her photos and MBA documents.

Bagyenda had a hard time explaining to the Katuntu-led committee why her aides broke security protocols in taking out three bags of classified information but later only returned two at the time when she was on the spotlight for maintaining several accounts in different commercial banks worth billions of shillings.

Although she admitted that bags containing information were stealthily sneaked out of Bank of Uganda premises by her aides, Bagyenda said she could not remember what the bags contained.

Abdul Katuntu: Is it true that bags and a box were carried out of your office without going through checkpoints?

Bagyenda: Yes

 

Katuntu: Did they contain documents?

Bagyenda: I don’t remember that. The bags had my photos and documents since I was doing MBA.

Bagyenda also failed to explain how Shs900m was paid to MMAKS Advocates, a law firm that reportedly offered legal consultancy on the sale of Crane Bank yet she personally wrote the letter to the Governor, Tumusiime Mutebile asking him to approve the payment of the money.

According to the Committee, there was no need for BoU to pay an external law firm the hefty sums when there was already another law firm that was offering legal counsel to the Central Bank.

Matters worsened when the BoU internal lawyer, Margaret Kasule told the Committee that she was never consulted before MMAKS Advocates was contracted to take over her duties even before terms of reference were clearly spelt out.

“I find it strange that Bank of Uganda has a fully fledged legal department but it decides to ask other law firms to draft the terms of reference for the Bank,” COSASE Chairman, Abdu Katuntu noted.

SOURCE: MatookeRepublic.Com

COSASE Orders Withdrawal Of Bagyenda’s BoU Car, Security

Members of Parliament have today directed Bank of Uganda (BOU) to withdraw the vehicle and security they have been providing to their former Director Bank Supervision, Justine Bagyenda.

For some months now Bagyenda who retired in July 2018 has been appearing before the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) alongside BOU officials to answer queries related to the sale of seven commercial banks.

The affected banks include; Teefe Bank which was closed in 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 recent 2016 sale of Crane Bank Ltd to DFCU at Shillings 200 billion.

Although she retired as a bank staff, Bagyenda has been using bank security and a vehicle from the date of her retirement. However, following reported security threats on her life, BOU decided to give Bagyenda a car and a security guard from 1st January this year to June 2019.

However, MPs sitting on COSASE directed the bank to withdraw the vehicle and security from the former BOU employee. Committee Vice Chair Anita Among said they are probing the wastage of public resources, but the bank of Uganda has gone ahead to continue spending public resources to cater for a non staff at the bank. 

She says there is no law under which Bagyenda, a retired staff should continue having those resources. In their defense, BOU said it has been the decision of the board to give Bagyenda security and a vehicle.

According to Jan Tibamwenda, the Acting Executive Director Administration, after consultation with security, administration of the bank decided to give Bagyenda the resources. He said these were only for her to keep coming for the COSASE probe. He said all the decisions were made by the board. 

However, MPs said it was the decision of the Government to provide a Ugandan with security and not the bank. Elijah Okupa, the Kasilo County MP said even Parliament writes to the Inspector General of Police who then assesses and decides on security of a person.

The committee concluded that the vehicle and guard be withdrawn by end of Friday today. They also suggested that an assessment of the financial implication of giving Bagyenda a vehicle and facilitation of former staff to keep appearing before the committee be submitted to the committee, and also an explanation on whether the BOU officers appearing for the probe were also being paid. COSASE is expected to finalise with BOU as an entity in the sale of the defunct banks today.  

SOURCE: businessfocus.co.ug

Bagyenda Bodyguard Says Lawyer Masembe Was Present When Bagyenda Stole BoU Documents

The bodyguard of former Bank of Uganda (BoU) Executive Director in charge of Supervision, Justine Bagyenda has revealed that lawyer Timothy Kanyerezi Masembe of MMAKs Advocates was present on the day they sneaked out documents from the Central Bank.

Juliet Adikolet (Bagyenda bodyguard) made the remarks on Thursday while appearing before Parliament’s Committee of Commissions, Statutory Authorities and State Enterprises (COSASE).

This was after Milton Orech, the Director Security at BoU revealed that they realized that on 4th February 2018, two visitors came to the Bank without clearance. It was a Sunday evening.

When reviewing the footage, Committee Chairperson, Abdu Katuntu asked Adikolet to reveal the gentleman behind her [in the video].

“That is [Timothy Kanyerezi] Masembe [lawyer belonging to MMAKs Advocates],” she replied.

The other person visitor that accessed BoU on that Sunday was Bank of Baroda Managing Director, Ashrin Kumar. The two Bagyenda visitors accessed BoU without clearance.

Orech said it wasn’t t Bagyenda responsible with clearing them, but she facilitated their entering on that day and they went to her office. It was also discovered that the vehicle that carried out the documents in question wasn’t registered.

When probed, Adikolet said she was sent by her boss to pick the visitors.

“My work is to give clearance to my principal, other issues aren’t my business because now the questions are becoming many,” she said, angering the MPs.

Mbarara Municipality MP, Michael Tusiime read out the Bank of Uganda administration manual that gives a category of the time to access the Bank and particularly non staff which is Monday-Friday between 8:30AM-5Pm.

However, Bagyenda’s visitors came on a Sunday evening according to the video footage.

Asked about the manual, Bagyenda, who has worked at the Central Bank for 35 years and four months said: “I didn’t know.”

Bagyenda added that she didn’t seek clearance for her visitors “because I didn’t know it was a policy.”

However, the BoU Security boss said it is the Human Resource to make sure staff understand the manual.

“As far as I know, there were several reminders to staff to adhere to manual. Manual is an instrument that is accessible to everybody in the bank,” he said.

Bagyenda failed to table minutes of the meeting and what it was all about.                

SOURCE: businessfocus.co.ug

Bagyenda Accused Of Usurping BoU Lawyers’ Powers

The former Central Bank Executive Director in charge of Supervision Justine Bagyenda has been accused of usurping the powers of the Legal Department, in her ploy to sell off Crane Bank Limited. 

The accusation came after reports that Bagyenda engaged external lawyers from MMAKs Advocates to offer financial advisory services on the closure of Crane Bank Limited without the involvement of the Legal Department in Bank of Uganda.

On Tuesday, BoU officials appearing before the same committee, failed to defend the Shs900m paid to MMAKS advocates for external legal advice during Crane Bank sale.

MMAKS Advocates were paid Shs914.2bn for legal advice during CBL intervention, resolution and advice on the sale of CBL assets and assumption of liabilities.

The firm would further be paid extra Shs3 billion as 5 percent commission on monies recovered from CBL shareholders. The MPs contend those payments were exaggerated to benefit some BoU senior staff involved in the sale of CBL.

The former Executive Director of Bank supervision at BoU, Justine Bagyenda failed to convince the legislators on the business MMAKS did with BoU as some records were missing. Committee chairman Abdu Katuntu said it was wrong for BoU not to have records on the particular transaction.

Bagyenda read to the MPs a memo/document of November 30, 2016 requesting for payment of the lawyers without showing the work that was done. BoU governor would on December 12, endorse and approve the request for payment of over US$51000 dollars as part of their total fee.

The law firm was hired after on October 28, 2016, BOU engaged PWC to carry out a forensic review of Crane Bank Limited (CBL) focusing on a 48-month period before statutory management which was completed on January 13, 2017.

On November 28, 2016, BOU engaged MMAKS Advocates to provide transaction advice to take over CBL and the firm would on December 9, 2016, on behalf of BoU, invite 13 bidders to bid for the purchase of assets and assumption of liabilities of CBL. Between 12th and 15th December 2016, BOU issued the Inventory report to 6 bidders after signing a confidential agreement with them to undertake due diligence on the assets and liabilities of CBL. Subsequently on 20th December 20, 2016, two bids were received and evaluated.

The costs to MMAKS are part of the Shs12 billion intervention costs BoU claims to have sunk in CBL during the takeover.           

SOURCE: businessfocus.co.ug

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