Speaker of Parliament Rebecca Kadaga.

The Speaker of Parliament, Rebecca Kadaga has said the August House will not be blackmailed or arm-twisted by any individuals as it considers a report by Committee on Commissions, State Authorities and State Enterprises (COSASE) on the closed seven banks.

Speaker Kadaga said on Tuesday as MPs debated the report that the House would continue to carry out its mandate and work as it is provided for by the Constitution.

Her comments followed responses by the Central Bank Director Financial Markets Development Coordination, Benedict Sekabira, and Kirkland Associates, who were mentioned and cited for wrongdoing in the Cosase Report presented to the House last week.

Stories Continues after ad

The committee chaired by Abdu Katuntu sought to establish whether the right legal procedures were followed by Bank of Uganda in closing Teefe Trust Bank, Co-operative Bank, Greenland Bank, International Credit Bank, National Bank of Commerce, Crane Bank Limited and Global Trust Bank Uganda.

In his response, Sekabira said that the report “omits crucial information” that he had presented during the course of the investigation, and hence contained “material misrepresentations”.

“I trust that you will indulge me in having the report corrected before it is adopted and that you will avail me the record of proceedings at the earliest,” he said adding that, “ln the event that my requests herein are not met, l will have no option but to conclude that you [Speaker] and the COSASE have elected to treat me prejudicially and with bias.”

Sekabira is one of the longest serving officials at BoU, having begun work there in the 1990s.

Sekabira was then serving as Director Commercial Banking and doubled as Bank of Uganda liquidator agent for International Credit Bank (ICB), Greenland Bank and Cooperative Bank. However, in his letter, Sekabira says that the report contains material misrepresentations.

“The report notes that I was agent of Nile River Acquisition Company Limited until 12th August 2009. The unfortunate impression created by this is that I acted alone and, presumably, with a conflict of interest. This is not true,” says Sekabira.

He adds that the COSASE report does not mention that his actions had been sanctioned by the Executive Committee of Bank of Uganda which information is contained in the meeting minutes held on 17th January 2008 when the request was presented, debated and approved.

“I am aware that this information was availed to the Committee by cover of letter of the Governor. The matter was also discussed in the proceedings of the Committee. In addition, I individually passed copies of the same to the Chairperson of the Committee, Hon. Elijah Okupa and Hon. Michael Tusiime,” he explains.

Sekabira also comments on the committee observed that between 12th and 16th February 2007 he travelled to New York with lawyer Kakembo Katende a BoU Consultant with M/s JN Kirkland a company that identified Nile River Acquisition as suitable to buy the loan portfolio.

He says that the dates stated for his travel are false since he travelled to and arrived in New York on 22nd July 2007 and that the purpose of his travels were clearly stated in a Memorandum to the Governor seeking approval, which approval was granted.

“The purpose of the said travel, as is reflected in the Memorandum, was to discuss 230 loans and to give comfort to the then intending buyer of the Portfolio as to the recovery ability of these loans. I only travelled to New York much later once the transaction was in progress and my input was required to reassure the buyer,” reads Sekabira’s letter of February 25, 2019.

He says that the committee seeks to create an impression that Kakembo Katende and him acted together in sourcing the purchaser of the portfolio of the closed banks something he said is false and unfortunate impression. He alleges that the observations are unfounded and a result of the Committee deliberately ignoring information in their possession.

“By this letter, I request that these wrong observations be corrected and that the report be amended before it is approved by the House. I write to request to immediately be availed a full and complete record of proceedings of the Committee that I might study the same and, if need be, request the correction of the same in the event that there has been inaccurate reporting. I believe this is my right under the Parliamentary Rules of Procedure,” further reads Sekabira’s letter.

Kirkland said they had submitted information to the Speaker to draw her attention to their concerns and correct the record of the House, or they would challenge the report in court.

They said that some parts of “the report contains many observations that are based on speculation and conjecture, blatantly false and fabricated information and several recommendations that are illegal on account of violation of the Constitution and other laws of Uganda.”

Kadaga said that she had no personal interest in the committee and had never met or talked to the author of the response, and had no reason to be biased against him.

“I want to remind public that the work of committees is bestowed by law and this House. Let no one try to arm-twist or blackmail us in doing our statutory duties,” said Kadaga, who promised to avail the new documents to members as they debate the report. “I do not know him, I have not talked to him or even sat with him,” she said.

Below is the verbatim of the debate in the house

Sarah Achieng Opendi, the State Minister of Health for General Duties and Woman MP, Tororo District

What is reflected in this report, especially the recommendations, do not match the findings that are written here and also what transpired before the cameras. Madam Speaker, I will just pick a few due to time. It is indicated in the report that the AG is supposed to do an audit of all institutions, if the auditor general cannot be availed with key documents on the sale, for example he asked for the inventory report which he couldn’t get. Even the committee in the course of its own investigations was not availed with these reports.
Madam speaker, if you do not have an inventory, what are you selling; and the other person, what are they buying? This clearly shows that may be there was some dealing between people within BoU and the buyers of these banks.
Based on that, I find the findings by the committee, and the recommendation that BoU should strictly follow the Financial Institutions Act in future tense. Really, after finding that banks were being sold without following the laws, people should be held responsible. We cannot sit here as parliament and simply adopt such a report without bringing personalities in this report. If we were in a developed country, people would have resigned. But this is Uganda where corruption seems to the order of the day.
For you to come up and say BoU officials who failed to properly execute their duties should be held responsible- who are these officials? Why didn’t the committee name them? I find this report lacking.
The IGG is mandated to investigate any acts of omission that could have occurred. This house should refer this report to the Inspectorate of Government so they can investigate and report to this house.

Nyabushozi County Member of Parliament Col Fred Mwesigye

Bank of Uganda is supposed to be the custodian of all financial systems, laws regulations and rules. Now that all the rules and financial systems have been abused by Bank of Uganda. Where do we run to next?
When you observe irregular, shoddy procurements, lack of record keeping, where do we go? The post mortem is done, what is next? This is my biggest question. These people (BoU) have been hiding within the law because of their independence, I would like to challenge parliament to quickly, through their methods of work to amend, overhaul this law concerning Bank of Uganda so that at least we make sure that all these recommendations as suggested by the committee are put in place immediately.
This is the only way we can save BoU, save our economic systems in Uganda; otherwise if we allow time to go on and the BoU will continue as has been and there will be remedy to this situation.

Denis Obua, Ajuri County

It is on record that Parliament has never investigated BoU because they have always hidden themselves under the law. As we speak any Uganda who followed this investigation, knows that BoU appears to be naked. I have analysed the report.
There has been no report from Bank of Uganda on any closure in 23 years; 7 commercial banks are closed without any reports, including the auditors who audited, no report was availed to them. Whether we like it or not the action of BoU is unfair to these commercial banks. I want to support the recommendations of the committee.
If we are saying that names were not mentioned, we need to name names of those responsible. I still remember the name of Bagyenda, I remember the name Kasekende, Margaret Kasule, I remember Justine (Bagyenda) and I still remember Sekabira. These names future prominently from Day 1 of the probe to the last day.

We are talking about BoU, the central bank of Uganda, the epitome of banking in this country. Madam speaker there is a problem with the board and management. They are fused. The ministry responsible here must introduce a bill here and we separate the board from the management”
Private lawyers who are directors of commercial banks must not be brought on board to act for and on behalf of Bank of Uganda. There is conflict of interest.”

Justine Khainza, Bududa Woman MP

BoU officials who failed to properly execute their duties according to the law should be held liable for the omissions and commission during their work in this process but the committee does not come out specifically to mention. We need to get the names of the particular officials. Even when you say the other institutions should take on we should have somewhere to start from. Who are these names, who are these persons and what are the offices?

Manjiya County Member of Parliament, John Baptist Nambeshe

“Madam Speaker, there is a one Sudhir Ruparelia, I didn’t know the man but as a whistle blower and the only disposed bank owner who neve let go, who fought back and his fight helped to exposed the incompetence, the rot in bank of Uganda, the culture of impunity in BOU, the criminality in BoU. I must thank Sudhir Ruparelia for the effort and exposing this rot.”

Paulson Kasana Semakula Luttamaguzi, Nakaseke South County

“If you change the way you look at things, the things you look at change. That is what happened to COSASE people. In the beginning they had started well, when they came to recommendations they started sugar-coating everything. The issue of generalising. Everything is generalised. We would have wanted to see the specifications of individuals, because we know that individual responsibility, individual crime. But you can’t tell me that you have made recommendations whereby it is incumbent upon you to see who to punish.”

Hon Mohammed Nsereko: “Madam Speaker, I am of the view that the loss incurred by the shareholder of these banks must be made good of”