BoU rot: Dr Sudhir sh’d be hailed for undressing BoU

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Sudhir and his son Rajiv at Parliament

By Kagenyi Lukka

Was BoU’s closure and sale of Dr Sudhir’s crane bank limited (cbl) a blessing in disguise for the economy and the nation at large?

This is the question that I have asked myself ever since parliament’s committee on state authorities and state enterprises (Cosase) started a thorough probe of irregularities that were cited in the closure and sale of commercial banks 1993-2016.

It was not until after the contested sale of cbl that parliament got interested in the issue of defunct commercial banks and thus ordered for a forensic audit into how the process was done by BoU.

It took the boldness of members of parliament like Hon Nandala Mafabi, Hon Rebecca Kadaga, Abdu Katuntu, Elijah Okupa among others who had to put their best foot down, defied odds and acted in support of the probe into BoU.

And the Cosase probe which has been on since late last year 2018 is in the final stages having held the last exit meeting with Bank of Uganda officials yesterday 13th February 2019.

The Cosase probe has undoubtedly not left BoU the same it was before. The higher BoU climbed, the more it exposed its genitals to the public (moreover dirty).

How Dr Sudhir exposed BoU

Truth be told that while seven commercial banks were closed, cbl was the biggest and all others seem to be an appendix in this exercise.

The reason for my argument is that we didn’t have public uproar about closed banks.

The discussion on defunct banks had started to wane and it wasn’t common to find topical debates on radio, television and in newspapers about the same.

Dr Sudhir, who had used his hard earned money to establish the bank couldn’t let it unjustly die as those involved in the process of ending it acted with impunity.

Therefore, the first point is that, Dr Sudhir and cbl were able to attract media attention and debate about the banking sector and the dirty role of Bank of Uganda.

Dr Sudhir exposed conflict of interest of lawyers and illegal transactions at BoU.MMAKS advocates and AF Mpanga advocates who were hitherto lawyers of cbl were declared conflicted by the commercial court in 2017.Without any shame, the two discredited law firms chose to be transaction advisors of BoU in the cbl transaction yet double dealing contravenes the ethical code.

By annulling their representation in any matter involving crane bank, questions about the legality of payments made to them came to the fore!

Dr Sudhir’s first success in the commercial court also led to questioning why BoU would hire external lawyers yet it has a fully-fledged legal department paid for by tax payers.

The process of recruiting these lawyers and payments also sprung up.

Sadly, lawyers who were once reputable were exposed as nearly dubious.

On Tuesday 12th February 2019, the Cosase shockingly learnt that without any documentation, Timothy Masembe and his MMAKS advocates pocketed tax payers’ money totalling to shs4.2B.

Masembe’s MMAKS Advocates were paid a whooping Shs.914, 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.

Here, Dr Sudhir exposed conflict of interest on the side of lawyers, possible fraud and collusion between BoU and lawyers as the lack of letters of engagement and minutes only sought to conceal their dealings.

Furthermore, it showed incompetence on the side of BoU.

*Thirdly, Dr Sudhir exposed the gross systemic weaknesses in Bank of Uganda. To claim that Cbl was undercapitalised was shallow of BoU which is located steps away from cbl headquarters.

Officials in BoU would have detected this in a short time since they can carry out uninformed site checks at cbl. By consistently awarding cbl best bank awards and later claim otherwise showed weaknesses on the side of BoU. The role of the supervision department came into question.

By what has been said before Cosase, it looks like the closure and sale of banks was patented by Justine Bagyenda, Benedict Ssekabira, Katimbo Mugwanya and Louis Kasekende who is on spot for approving Ug shs 478 injected in Cbl.

If BoU’s systems aren’t weak, there is no way banks could have been closed without minutes, valuation reports and other supporting documents.

Fourthly, Dr Sudhir unearthed the lack of accountability in Bank of Uganda. For fact, BoU couldn’t account for Ugsh 478 billion injected in cbl and why BoU would inject Ugx 478 billion in a bank and only sold it at ugx 200bn.

Finally, Dr Sudhir’s effort became a wakeup call for shareholders of other defunct banks to assert their demands for justice thus his preeminent role in exposing BoU has left a permanent mark.

Whichever reforms come after this probe will not be linked from the unequivocal contribution of Dr Sudhir Ruparelia.

Lukka.kagenyi@gmail.com

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