By Kagenyi Lukka
A fresh scandal is brewing within the corridors of Bank of Uganda (BoU) following the questionable payment of sh6b to city lawyers in order to fix the forgery of minutes of the sale of Crane Bank to Dfcu.
Sources inside the banking sector say that the payment of sh6b to crooked lawyers, Daudi Mpanga of Bowmans and Masembe Kanyerezi of MMAKS follows a series of meetings that have been held between Dfcu and BoU, to find mechanisms of forging minutes or at least find a way of sanitizing the fraudulent sale of Crane Bank to Dfcu so that the Danish investors can be hoodwinked into buying a stake.
It has been further revealed that the sh6b payment of tax payers’ money was sanctioned by two BoU directors, Benedict Ssekabira, of Financial Markets Development Coordination (FMDC) and Margaret Kasule, director legal services, are under probe by the State House Anti-Corruption Unit for authorizing the payment, which has been described my financial analysts as “a designed and syndicated wastage of tax payers money”.
According to sources, the sh6b money was released to cover all the legal loopholes in the case of Crane Bank takeover by Dfcu.
“Bank of Uganda is still wasting tax payers’ money on fake law firms in fixing the already bad deal that resulted in the purchase of Crane Bank by DFCU on WhatsApp. It appears DFCU is struggling and wants to sell some shares but its past transactions that were fraudulent in nature and also involved paying back money to (corrupt) BoU officials are now coming back to bite them,” sources said.
“These reports are not reflecting well on investors that find the bank not worth their investment, the Bank Board is also trying it’s best to stop shareholders from the meeting. Credibility and trustworthiness of a Bank is key to bank investment decisions, once that is found lacking then it’s difficult for any serious businessman to acquire shares,” sources added, revealing that the sh6b was given out to lawyer Mpanga to facilitate his activities in trying to fix what can’t be fixed.
“It’s believed that BoU internal head of Legal is working closely with External Lawyers Mpanga who is also a former lawyer to Sudhir which is in total violation of legal practice. Taxpayers money should be put to proper use, these mafias have exploited the system especially BoU which currently has very little check controls. The appointing authority should quickly act otherwise we can’t keep re-capitalizing as they abuse our funds with impunity,” the source added.
The two lawyers represented BoU and the payment for their services has been ongoing until parliament probing committee, Committee on Commissions, State Authorities and State Enterprises (COSASE) that investigated BoU over the controversial sale of seven commercial banks between 1993 and October 20, 2016.
However, in December 2017, the Commercial Court disqualified the two city lawyers Kanyererezi Masembe and Mpanga from the Sh397 billion Dr. Sudhir Ruparelia’s case against Bank of Uganda (BoU), citing conflict of interest.
In his ruling delivered on December 21, 2017, the head of the commercial court division, Justice Wangutusi stated that Mr. David Mpanga of A.F. Mpanga Advocates and Timothy Masembe of MMAKS Advocates acted in violation of the Advocates (Professional Conduct) regulations.
“The shareholders of DFCU are expected in the country anytime to hold a meeting with DFCU on how it fraudulently acquired Crane Bank. The lawyers, David Mpnaga, Timothy Masembe, Andrew Kasirye, Margret Kasule are all panicking trying to back-date minutes and other documents. The lawyers received the money on Monday from BoU to cover all gaps in the Crane Bank deal. By the time, Mutebile was not in office. He is on leave the Money was authorised while Mutebile is on leave,” sources have revealed.
Sources say these lawyers, Dfcu and BoU don’t want Dfcu shareholders, to come to Uganda before their forgeries of Crane Bank sale document are finalised.
Dfcu investors, Commonwealth Development Corporation (CDC), want to close an urgent deal with the Danish Investment Fund for Development Countries, which will see them sale a 9.97% stake.
“Actually, Mpanga might next week fly to UK to meet some people. Jimmy Mugerwa of Dfcu has arranged the meeting. Mpanga and Masembe failed to cover up the mess and shareholders of Dfcu are planning to come to Uganda soon to check on what really transpired during the sale of Crane Bank. That is why Mpanga and Masembe are trying their best to forge minutes,” sources added.
Last week it was reported that a series of clandestine meetings had commenced between top Dfcu officials and Central Bank’s management echelons over how to forge and backdate minutes concerning the sale of Crane Bank in order to close a share capital sale deal, multiple sources within the banking sector.
The aim of these closed door meetings, sources further say, is to find mechanisms of circumventing past and daunting illegal transactions that saddled the sale of Crane Bank in order to pave way for Dfcu to sale its stake to a frugal international investor.
However, the stumbling block is the fact that there are no documents of Dfcu dealings with Bank of Uganda, including those supporting the sale of Crane Bank, which is a key ingredient that the financially frugal investor, wants to be ticked before they can ink the deal.
“BoU and Dfcu transactions in purchase of Crane Bank Limited had no Minutes,” sources said.
“Surprisingly minutes are being manufactured God knows from where, it should be noted that the auditor General requested for these minutes from both DFCU and BOU nothing came out, Parliamentary committee COSASE also asked for these minutes but in vain. Where are these minutes coming from, is it possible that Mpanga is working his Black Magic over these minutes,” sources added.
Last year Parliament also conducted a special investigation into the mismanagement of the Central Bank and the controversial sale of commercial banks, including Crane Bank, and recommended that contracts of the governor Emmanuel Tumusiime Mutebile and his deputy, Kasekende should not be renewed over the mismanagement of the Crane Bank sale transaction.
The MPs in their report of the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) also accused the top echelons of the central bank of mismanaging the sale of seven commercial banks, including that of Crane Bank.