The parliamentary committee on Statutory Authorities and State Enterprises (COSASE) chaired by Bugweri County MP Abdu Katuntu has today tasked the Bank of Uganda to account for all legal fees that it has spent from 2013 including fees involved in the case between BOU and Crane Bank.
The committee guided the BOU officials led by Deputy Governor Louis Kasekende, not to delve into the merits and demerits of the ongoing case between BOU and Crane Bank, but instead breakdown the amount of money that has been spent.
COSASE deputy chairperson of Anita Among noted that despite reports indicating that the BOU spent over Shs 3.6 billion in the financial year 2015/2016, other reports indicate the central bank spent only Shs 1.6 billion.
“Is this a budgetary problem or expenditure problem?’’ Ms. Among wondered.
She further noted that the BOU has nine lawyers however contracts have always been given to external lawyers, adding that the external lawyers have always been paid much money before even signing legal contracts with them.
‘’We want you to give a breakdown of that money, not just saying we spent six billion shillings because it is tax payers money,” Ms Among instructed the BOU officials. Earlier BoU in a press statement denied they hadn’t paid any money to external lawyers but documents obtained but this website show over Shs4 billion was paid to MMAKS Advocates alone.
In response the BOU officials asked for more days to compile a comprehensive report and the committee responded by giving them two days.
The committee will again convene on Tuesday and Wednesday next week after receiving the report.
Last week the EagleOnline broke the story detailing how city law firm MMAKS and audit and accounting firms PwC and KPMG were paid billions of shilling in legal and managements costs by BoU in respect to the ongoing case between the central bank, Crane Bank (in receivership) and city tycoon Sudhir Ruparelia.
The case has since been referred for mediation.
It was discovered during the Committee session to respond to the Auditor General’s queries, that the Central Bank paid out Shs61M in 2013/2014, while in the next financial year, the Bank paid Shs681M in 2014/15 and in 2016/2017,Shs398 million was reported to have been spent by June 2017.
But the legal fees bill shot up in 2017 when Shs1, 446,954,550 was recorded to have been paid by September 15, 2017.
This raised questions over the budgeting process in the Central Bank after it was revealed that most of the money paid in legal fees resulted from other departments.
Committee Chairperson, Abdu Katuntu asked the Central Bank’s officials if they issued any public notice on the amount of money spent on the Crane Bank case.
Margaret Kasule, Legal Counsel at BoU declined to reveal the amount so far spent saying it would jeopardize the merits of the case under mediation at High Court-Commercial Division, stating: “When we were coming for this meeting, we didn’t prepare anything to do with Crane Bank.”
But Katuntu rejected Kasule’s response saying that his demands have nothing to do with the merits of the case.
“I just want to know how much money BoU has spent. Is it that you aren’t hiring qualified lawyers or can’t train them and are doing clerical work? You need to hire lawyers who are well experienced, then train them,” Katuntu said.
During the proceedings, MPs came to learn that the Central Bank hired private lawyers to help register its land titles and mortgages for properties.