GTB sale: Bagyenda was the governor, board and legal counsel

Ms Justine Bagyenda appearing before COSASE to answer queries on Bank closure

By Kagenyi Lukka

While officiating as the chief guest on an event to mark the 25th anniversary of Transparency International a few days ago, President Yoweri Museveni dropped a bombshell on Bank of Uganda(BOU) after he singled it out as one of the most corruption riddled institutions despite the healthy remuneration.

In so doing, Mr Museveni rejected the notion that it is because of low pay that some government officials are corrupt. The president instead called for patriotism.

The President’s remarks on the Central Bank came on the heels of   Parliament’s probe into the closure and sale of defunct Commercial banks 1993-2017.

The committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has been quizzing BoU officials over irregularities that marred the closure and sale 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).

Taking a chronological order, COSASE is now probing irregularities that surrounded the rushed closure and sale of Global Trust Bank(GTB) in 2014.

In a space of less than one day, Justine Bagyenda, the extinguished former executive director for commercial banks supervision at BOU, closed and sold GTB. This was unmasked yesterday as she appeared before the Katuntu led committee.

Claiming to be working on behalf of BOU, Justine Bagyenda closed Global Trust Bank on 25th July 2014, and on the same day sold it to its hitherto premeditated acquirer, DFCU.

This is according to the nondisclosure agreement signed between Justine Bagyenda and DFCU’s Juma Kisaame on 10th July 2014,15 days before GTB was sold.

The signing of this agreement was a direct affront on section 40(3) of the Bank of Uganda Act which states that; “The bank shall not publish or disclose any information regarding the affairs of a financial institution or of a customer of a financial institution unless the consent of the institution or the customer has been obtained.”

This is because there is no documentary evidence to prove that Bagyenda had consent of GTB.

Justine Bagyenda acted ultra vires

To act ultra vires is a term that is synonymous with legal practice and a person acts ultra vires when he/she does something outside their authority.

With no green light from the governor, deputy governor, legal counsel and Board of the central bank, Bagyenda acted outside her authority.

In yesterday’s session, Bagyenda’s actions were flatly disowned his former boss, Professor Emmanuel Tumusiime Mutebile and BOU’s secretary to the board who boldly denied ever discussing a matter of GTB.

Bagyenda’s impugned actions contravened section 3 of the BoU Act that designates the Governor, deputy governor and the board secretary as only legally entrusted with signing on authentic documents of the bank.

Section 3 of this Act provides that, “The seal of the bank shall be authenticated by the signatures of the governor and the secretary to the board”.

It further provides that, In the absence of the governor, the deputy governor may sign in his or her place, and the person performing the functions of the secretary may sign in the absence of the secretary.

A document issued by the bank and sealed with the seal of the bank and authenticated in the manner provided under this section shall be received and taken to be a true document without further proof unless the contrary is shown.

Bagyenda’s actions are criminal, and it should only be a matter of time that she is made to face the long arm of the law as the public is questioning why the big fish like her is left to swim as small ones like guards at BoU are arraigned before courts of law.



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