Justine Bagyenda’s long and glorious tenure as Executive Director in charge of Supervision at the Bank of Uganda (BOU) came to a surprising end when the Governor, Prof. Emmanuel Tumusiime-Mutebile, on February 2, 2018, fired her as he made changes he said would scale up efficiency of the financial industry regulator.
The new changes, which Mutebile said were ‘normal’ at BOU, would immediately bring in Dr. Tumubweine Twinemanzi, formerly working with the Uganda Communications Commission (UCC) as Director Economic Affairs, to replace Ms. Bagyenda. Prof. Mutebile, according to analysts, is punishing long-serving Bagyenda for the mess she reportedly caused as BOU sold Crane Bank to DFCU Bank at just Shs200b.
It is alleged Bagyenda sanctioned the payment of Shs13 billion legal fees to MMAKS Advocates and AF Mpanga (Bowmans) to defend BOU against Sudhir Ruparelia for allegedly using Crane Bank money worth about Shs400 billion. Though Mr. Ruparelia has dismissed the allegation as untrue, the case is in Commercial Court and Bagyenda is expected to be a key witness.
But MMAKS and AF Mpanga law firms won’t represent BOU as court dismissed the advocates for ‘conflict of interest’, having worked for Crane Bank. This further brought the central bank on the spot as it made losses worth Shs5.4 billion in three months, having brought on Sebalu and Lule Advocates to replace the two law firms mentioned earlier. Indeed, BOU had to face the wrath of Parliament for the loss made.
Bagyenda, who was to retire in June this year, having worked at BOU for over 30 years, is contesting her dismissal and has not officially handed over the office to her successor, even as reports indicate the latter has assumed his duties. She accuses Prof. Mutebile of ignoring the law when he fired her. She has since moved in another office at BoU. She says she is a public servant who is permanent and pensionable and cannot just be dismissed without clear reasons, the reason she rushed to the Inspector General of Government (IGG), Irene Mulyagonja, who now is at loggerheads with Mutebile over Bagyenda’s dismissal.
But insiders say this was an alleged cover up for the bad deals orchestrated by Bagyenda and the law firms that would later present an opportunity enabling DFCU Bank to hurriedly buy off Crane Bank, with the executors of the deal reportedly expecting to gain from the transaction. Bagyenda’s genesis of financial troubles, analysts say, start here. She is now battling to save her image as several accountability oversight agencies like Parliament and Financial Intelligence Authority (FIA), close in on her.
IGG Vs Mutebile fight over Bagyenda
Bagyenda’s rush to the IGG has not helped her regain her juicy job that she used to amass wealth in billions of shillings and properties. Despite the IGG Irene Mulyagonja writing to Mutebile to rescind his decision, Mutebile says the Constitution gives him independence to streamline the human resource at the central bank when need arises. Interestingly, the BoU Act gives Mutebile, who is a Governor and doubles as the chairperson of the BoU board, powers to enforce several issues at the bank without necessarily going through other channels.
Consequently, he has asked the IGG to back off. The public is watching as the Governor and IGG quibble over the interpretation of the law. Latest is that President Yoweri Museveni has this Monday summoned the two principals to a meeting at State House. This meeting could provide the decisive line in the multi-faceted saga that has drawn in the ‘who-is-who’ in the country.
Bagyenda’s billions
Leaked documents show that Bagyenda stashed billions of shillings totaling 20 billion in various bank accounts in just six years, on top of owning properties worth billions of shillings. This has caused her more trouble, causing the IGG and now Financial Intelligence Authority (FIA) to launch investigations into her sources of income. Bagyenda formerly chaired the FIA board when she still held the supervisory role at the central bank
The investigations
City lawyer Denis Nyombi recently wrote a letter asking Parliament to investigate Bagyenda’s wealth. “The purpose of this letter is to inform you that our client (whistleblower) is in possession of information about some of the properties of Bagyenda, which he says were not declared as required the Leadership Code Act 2002,” part of the letter wrote. The Act is meant to stop public officials from engaging in corruption.
Nandala Mafabi accuses Bagyenda, banks of money laundering
Budadiri West MP and former Leader of Opposition in Parliament, Nandala Mafabi, a distinguished accountant has called for the investigation and prosecution of Bagyenda over money laundering. “We are going to carryout investigations and we are going to deal with those banks because they have been doing illegal things with Bagyenda,” Mafabi fumed during a recent press conference held at Parliament.
The MP was warning Barclays Bank and Diamond Trust Bank, among others which are not happy with their staff who leaked Bagyenda’s transactions to the public. Mafabi says that if convicted of corruption, Bagyenda could serve twenty years in jail for money laundering, according to Mafabi.
FIA orders closure of Bagyenda’s accounts
The Financial Intelligence Authority (FIA) has confirmed that an investigation into Bagyenda’s billions of shillings is ongoing. Bagyenda was a board member of the FIA before she was axed. The Executive Director of FIA Sydney Asubo said days ago they were acting on a petition from a whistleblower who indicated that Bagyenda’s wealth is not commensurate with employment at her former job, suggesting she could have been involved in money laundering.
Asubo said FIA would share information with relevant law enforcement agencies to take action. “The information we have, we shall share it with other law enforcement agencies. We are still compiling information about the financial dealings of Bagyenda. We shall then have to verify it,” he said in Kampala.
Accounts frozen
Latest reports coming in Monday say FIA has instructed banks to close Bagyenda’s accounts after she failed to appear there for interrogation last week. If true, this means she won’t transact any business on those accounts.
Last month, a whistleblower petitioned the Inspector General of Government (IGG) claiming that Bagyenda had accumulated more than Shs 19 billion within a space of two years.
She is also linked to 17 properties in central and western Uganda worth several billions. Bagyenda was supposed to declare her wealth under the Leadership Code Act that stipulates that a person shall within three months after becoming a leader and thereafter every two years, during December submit to the IGG a written declaration of their income, assets and liabilities.”
The IGG has since opened investigations into the allegations. But one wonders how the IGG will save her job at BOU given her questionable acquisition of too much wealth.
URA taxes
Bagyenda is also on the URA radar for alleged tax evasion especially as regards her real estate empire (rentals) where she earns hundreds of millions monthly without reportedly remitting corresponding taxes to URA.
Bagyenda was also attached to Microfinance Support Centre. She was also contact person for IMF/World Bank and Board member, Insurance Regulatory Authority.
Bagyenda’s sad ending in financial sector
Those who have watched Bagyenda’s rise in the financial sector especially at BOU claim that despite the fact that she was about to retire, her current position is precarious and is likely to impact on her future dealings in the financial sector.
She will mostly likely concentrate on private business, albeit with hiccups, they say.
