Divisionism hits BoU board over Shs48bn dfcu compensation

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Bank of Uganda

By Lukka Kagenyi

A new row has hit the Central Bank over the sh48b compensation to Dfcu Bank following its illegal acquisition of Meera Investment property belonging to city businessman, Dr. Sudhir Ruparelia.

Sources within Bank of Uganda say that the division has escalated from the top floor of the Central Bank where the Governor, Prof. Emmanuel Tumusiime Mutebile and his deputy, Dr. Louis Kasekende, don’t see eye to eye over the matter, to the board, which runs the policy directions of the country’s top bank.

Within the board, sources further reveal that the odds are all out for a serious fight over the compensation saga, with some members totally opposing the matter.

Those that oppose the matter are aligned to the camp of Mutebile while those against the matter are on Kasekende’s side.

Sources say the board is now torn apart, a move that has paralyzed the debate on the matter.

Insiders say, Mutebile is against the compensation, and, according to sources, argues that Dfcu took over the assets of Meera Investments illegally, and has no locus to turn around and seek compensation for fraudulently taking over the assets at the expense of tax payers.

On the other hand, Kasekende, sources say, vehemently wants the compensation to take shape, especially given the fact that it is the Central Bank that allocated the assets during the takeover of Crane Bank.

However, Kasekende’s position, sources say, has been shot down by other board members, who argue that Dfcu took over the property on a financial frolic of their own because they received independent legal advice from half-backed lawyers from Sebalu & Lule Advocates.

This position has been buffered by recent court rulings indicating that lawyers from Sebalu & Lule Advocates, wrongly advised Dfcu on the takeover of the property, which belong to Meera Investments and not Crane Bank as the so-called lawyers had advised.

Sources have further revealed that the matter has now paralyzed activities of the Central Bank board, with board members Dr. William Kalema, Suzan Wasagali Kanyimibwe, the board secretary and Keith Muhakanizi, the permanent secretary of the ministry of finance and secretary to the treasury, undecided on the matter.

On the other hand, James Kahooza, another board member, sources say, is for the now controversial compensation.

This has also created camps with some aligning to Mutebile while others to Kasekende over Dfcu’s demand for compensation of the sh48b.

The impasse has come at a time when the contracts of Mutebile and Kasekende are also about to expire as the January 2020 draws nigh.

In its annual report, the Central Bank stated that Dfcu conceded that the 48 properties that are currently housing the bank’s branches were illegally taken-over following the repossession of Crane Bank.

Interestingly, even with clear proof that the property was illegally taken over, following the amateurish legal advice from Sebalu & Lule Advocates, the Dfcu want tax payers to cough sh48b as compensation for their illegal act of taking over property belonging to Meera Investments and not Crane Bank.

This arrogance and impunity has been further proven by the fact that Dfcu after realizing that Sebalu & Lule Advocates gave them a raw deal, and therefore discarded them by hiring fresh lawyers from M/s Kalenge, Bwanika, Ssawa & Co. Advocates.

If indeed Sebalu & Lule Advocates were giving Dfcu good legal advice, why then is the bank sacking the lawyers?

It is not the first time that the law firm Sebalu & Lule Advocates have come under spotlight over shoddy work.

In April this year, Justice Paul Gadenya also ordered Dfcu and Sebalu & Lule Advocates to pay costs to Crane Management Service over conflict of interest.

 “I hold that the applicant (Crane Management Services) has made out a case that the first respondent (Sebalu & Lule Co. Advocates) is in possession of privileged and confidential information that came into his possession by virtue of being counsel of applicant,” Gadenya said in his far-reaching judgement against the controversial law firm, Sebalu & Lule Advocates.
Gadenya added: “The first respondent (law firm) is therefore conflicted and cannot ably represent the 2nd respondent (dfcu). I accordingly grant an injunction stopping the 1st respondent from acting as counsel for the 2nd respondent in this case.”

It therefore follows from the above ruling that Dfcu and the Sebalu & Lule law firm that gave them wrong advice on the illegal possession of the property of Sudhir, should squarely pay Meera Investments for illegally occupying the said property.

So, why should Dfcu get compensated at the expense of the tax payers? In any case, it is Dfcu that should pay Suhdir and Meera Investments for illegally occupying the company’s property.

If Dfcu can swallow the humble pie, vacate Meera Investment properties and pay for illegal possession of the same, then, tax payers’ money will be saved.

In fact, even these unnecessary camps taking shape at the Central Bank over the sh48b compensation would not arise.

The writer is a current affairs analyst and aspiring MP Ikiiki County in Budaka district.

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