The ground can no longer hold for BoU officials.

The Bank of Uganda sold the loans of International Credit Bank (ICB), Greenland Bank and Cooperative Bank using an agreement that recognises the English Law, rather the Ugandan Law, MPS on Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) heard on Wednesday.

BoU signed an agreement with Nile River Acquisition Company to buy debts of the three banks worth US $5.2 million (Shs8.89 billion). The debts originally had a book value of Shs135 billion.

The MPs were perturbed by BoU’s selection of the English Law rather than the Ugandan Constitution and the related banking laws of the country. “We make these laws because we want them to govern all the transactions in our country,” Committee Chairman Abdu Katuntu said.

The MPs are probing BoU top officials led by the Governor Prof. Emmanuel Tumusiime-Mutebile and his deputy Dr. Louis Kasekende.

BoU sold the loans at abnormal discount of 93 per cent to the company registered in Mauritius a tax haven but its parent Company M/s American Octavian Advisors LP is based in England.

At the end of the agreement, no names of those who signed. “They were so much in the hurry that are no names of those who signed the agreement.

When asked why BoU decided to opt for English Law, its legal secretary, Margaret Kasule said the buyer-Nile River Acquisition preferred the English Law in case of a commercial dispute, the company being a foreign one.

Committee Chairman Abdu Katuntu said by ignoring the laws of Uganda in the transaction, BoU had contravened the Ugandan law. MPs wondered whether BoU was desperate to sell the debts whose value was reduced from 135 billion to just Shs8.89 billion.

“In the case of ICB, Greenland Bank and Cooperative Bank the total loan portfolio sold of Shs135 billion included Secured loans of Shs34.5 billion which had valid, legal or equitable mortgage on the real property and were supported with legal documentation but were sold to Nile River Acquisition Company at a 93 per cent discount,” the Auditor General says in his special audit report of BoU on defunct banks.

Aruu South Member of Parliament Odonga Otto said some government have used such agreements to fleece government of money. Concern also is that the Nile River Acquisition might not have paid taxes to government.

Up-to-date, the BoU officials have failed to produce all documents required by Cosase to validate the transactions of the three banks and now Abdu Katuntu has ordered the public servants to make an inventory of the reports and ensure that they search and being the missing reports to the Committee.

Benedict Sekabira to produce appointment letter

The committee members on Wednesday were tough on Benedict Sekabira, Director, Financial Markets Development Coordination, for failing to present his appointment letter as liquidator of Greenland Bank. He was tasked to bring the letter without fail tomorrow Thursday.

The former Executive Director of Supervision at BoU Justine Bagyenda also appeared before the committee to answer some queries, even as the Inspector General of Government is investigating her over alleged illegal accumulation of wealth.

However, MP Odonga Otto asked Committee Chairman whether it was procedurally right for Ms Bagyenda to appear before yet she declined to appear before the Parliament’s Appointments Committee for vetting when Finance Minister Matia Kasaija appointed her to the board of the Financial Intelligence Authority (FIA).