Lawyer Masembe tries to dodge Cosase, faces Katuntu wrath

Cosase in session

Lawyer Timothy Masembe of MMAKS Advocates early Tuesday tried to dodge the Committee on Commissions Statutory Authorities and State Enterprises (Cosase).

Masembe who is accused of fraudulently pocketing Shs900m in the controversial sale of Crane Bank (CBL) to dfcu, snubbed the parliamentary committee this morning.

Masembe was a no show at the committee where his MMAKS Advocates was appearing.

He was represented by other lawyers who were kicked out of the meeting for failing to present crucial documents regarding the sale of Crane Bank.

The furious Cosase chairperson Abdu Katuntu summoned him to appear before Cosase at 2pm without fail.

Katuntu ordered them to return at 2pm with all supporting documents and also ordered lawyer Masembe to appear in person.

MMAKS Advocates were paid Shs914, 272,722 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% commission monies recovered from CBL shareholders.

The MPs contend those payments were exaggerated to benefit some BoU senior staff involved in the sale of CBL.

BoU officials kicked out over documents

On Monday, Cosase kicked out Bank of Uganda officials led by the Governor, Emmanuel Tumusiime Mutebile for appearing without supporting documents to their presentation.

The officials had appeared to respond to accusations by the shareholders and directors of the seven defunct commercial banks that were closed by the Central Bank between 1993 and 2016.

Tumubweine Twinemanzi, the BoU Executive Director of Supervision started off by disputing allegations made by the shareholders of the defunct Global Trust Bank (GTB), regarding the manner in which the bank was shutdown.

GTB was closed in 2014 due to persistent losses amounting to Shs60 billion.

However, while appearing before COSASE in December 2018, the shareholders of GTB insisted that their business model was not designed for quick profits.

They also claimed that they had responded to all demands by the Central Bank to inject additional capital into the business including US$ 10 million between January 2013 and May 2014.

Katuntu tasked the BoU officials to respond to the claims by GTB. He wondered why BoU didn’t give GTB time to prosper since the prevailing situation wasn’t unique to the bank.

Twinemanzi argued that the GTB losses were increasing every quarter. He cited a letter written by the shareholders in which, they were complaining of repeated capital calls.

When tasked to produce the letter, Mr Tumubweine said he had submitted it to the committee, a claim that was disputed by Mr Katuntu.

He noted that the whole presentation was flawed since it wasn’t backed with any evidence from BoU.

This prompted several MPs to point out more weaknesses in the presentation forcing Katuntu to adjourn the meeting to Tuesday.

Katuntu asked the Central Bank to present the reports and financial statements of Greenland Bank, International Credit Bank (ICB) and Cooperative Bank as of 2016.

“We need documentation on Cooperative Bank and Greenland for the period ending June 2016. Colleagues, be aware that there is no opportunity for us to adjourn this meeting after tomorrow. We must finish this business tomorrow and not beyond,” he noted.

Katuntu leaving on Feb 22

Katuntu says he will not chair the committee beyond February 22.

The committee, which is investigating the circumstances under which the Bank of Uganda (BoU) closed seven commercial banks over the years, is yet to conclude public hearings, retreat to material gathering and write a report.

Katuntu, however, promises an exhaustive outcome.

The committee has been investigating the matter since November and promised it will present its report.



Please enter your comment!
Please enter your name here