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Yes I Took Away Documents from BoU-Bagyenda Tells COSASE

Former Director of Supervision for Commercial banks at Bank of Uganda (BoU), Ms Justine Bagyenda on Wednesday accepted that she had taken documents out of the central bank even though she said most of them related to her consultancy work and not the sale of commercial banks.

Ms Bagyenda said as she and BoU staff was appearing before Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) for questioning over closure of seven commercial banks whose vital documents relating to transactions have gone missing.

In late November all fingers seemed to point to Bagyenda regarding the missing inventory reports and others. Benedict Sekabira, the Director Financial Markets Development Coordination in December said it was only Bagyenda who can reveal where some of the files were. Suspicion was that Bagyenda picked files when she was in February 2018 fired unceremoniously by the Governor Emmanuel Tumusiime-Mutebile, six months to her retirement. As Executive Director of supervision, her role was to ensure the stability of the banking industry but her boss sacked her after the Crane Bank scandal emerged.

Ms. Bagyenda was heavily involved in the controversial closure and sale of Global Trust Bank Uganda (GTBU) Crane Bank Limited (CBL) to Dfcu Bank in July 2014 and January 2017 respectively. CBL was sold on credit at Shs200 billion that is being paid in installments, with the central bank claiming it spent Shs478.8 billions of taxpayers’ on CBL before selling it to Dfcu Bank.

Cosase does not have all the required documents of defunct banks because BoU staffs have failed to present all of them, with claims that some are misplaced somewhere within the bank, even though it has an archive department.

Sources within BoU say Ms. Bagyenda worked closely with BoU’s Deputy Governor Dr. Louis Kasekende in the closure and liquidation of some of the banks, for instance, CBL whose closure caused the on-going Cosase probe that so far has not gotten satisfactory answers from the BoU. The problem has been the official’s failure to avail them with all the documents related to defunct banks.

BoU director of security Milton Opio in November told the MPs that Ms Bagyenda facilitated the theft of documents from the central bank. Opio said that their CCTV camera’s captured Bagyenda’s assistant’s smuggling bags of documents from the central bank early this year. Opio made the revelation under the directive of BoU governor Emmanuel Tumusiime-Mutebile, who had been tasked to explain whether the central bank had any case of stolen documents.

Meanwhile BoU officials were on Tuesday tasked to provide terms of reference under which they offered law firm MMAKS Advocates Shs900 million as legal fees during the sale of Crane Bank. The BoU officials could not provide the documents. It also emerged that Sekabira was responsible for payment to the law firm instead of Kitimbo Mugwanya.

The law firm was paid a total of Shs914 million but BoU officials who appeared (COSASE couldn’t provide terms of reference under which they engaged MMAKS/Africa Legal Network

The firm was also paid a further Shs3 billion as commission for monies recovered from Crane Bank shareholders.

The probe follows an Auditor General’s report that probed the closure and sale of seven commercial banks and pointed at possible corruption within BoU. While querying the law firm’s payments, some MPs argued that the payments could have been inflated to benefit corrupt BoU officials.

The MPs pointed fingers at the embattled former Executive Director in Charge of Commercial Bank Supervision Justine Bagyenda as a possible beneficiary, but she read to the MPs a memo/document dated November 30, 2016 requesting for payment of the lawyers, but which didn’t show proof of work done.

The Governor Tumusiime-Mutebile used the memo as a basis to endorse payment of US $51,000 (Shs180 million) as part payment of the legal fees in December 2016.

The Committee Chairperson Abdu Katuntu, said it was wrong for BoU not to have proper records on the particular transaction.

The probe was expected to continue Wednesday when BoU officials were expected to appear accompanied with representatives of M/S J.N. Kirkland & Associates and Sil, the two firms that participated in the sale of assets of Greenland Bank, International Credit Bank and Cooperative Bank to Nile River Acquisition.

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