A section of the Bank of Uganda (BoU) Board want head of legal department, Ms Margaret Kasule relieved of her duties due to unsatisfactory performance who , a reliable source within the institution has told this website.
“Some board members are wondering how Kasule was able to get that job that needs somebody who is very sharp and knowledgeable about Ugandan laws,” a senior official said, further saying that Kasule’s self-confidence has gone down since parliament launched a probe against BoU over the closure of commercial banks.
He said Kasule is supposed to be the institution’s authority on legal issues, such as drafting legal documents as well as shielding the institution from falling into situations where it is likely to attract legal suits. However, this department and Kasule in particular has failed to deliver on that mandate, costing BoU billions of shillings in legal costs.
The department and more so its head Ms Kasule has turned to be the worst performing due to many scandals and legal battles that BoU is fighting and many are as a result of Kasule not advising BoU as a professional in the legal field.
Members of the board say Kasule has relied so much on the external lawyers to do her job and as such her input is insignificant, this website was told. “They think that external lawyers from MMKAS and AF Mpanga Advocates took advantage of Kasule’s inexperience in legal matters to con BoU of billions of shillings in legal costs and advice,” the official said.
The official added that the two law firms, according to the BoU board, have been a curse rather than a blessing and that Kasule takes the biggest portion of the blame since she failed to check the tricks of the two law firms who were more interested in reaping money from BoU than giving counsel that would have helped BoU keep off from the recent scandals and legal battles.
For instance, when Mr John Muwanga, the Auditor General wanted to launch his audit into BoU over the closure of the banks, the institution would first frustrate him that the probe would amount to sub judice since there was a related case in court. That was the ill-advice of BoU’s legal department, though it would be upheld by the Solicitor General. It would take the courage of Speaker of Parliament Rebecca Kadaga to insist that the Auditor General probes BoU as the exercise had nothing to do with the case in court where BoU/Crane Bank In Receivership had sued Sudhir Ruparelia and Meera Investments Limited for allegedly swindling Crane Bank Limited of Sghs397 billion.
Further, the Auditor General in his special audit report observes that some of the documentation relating to Teefe Trust Bank specifically the inventory report, loan schedules, customer deposit schedules, statement of affairs and reports supporting assets and liabilities taken over by BoU was not availed him as some were reported missing. The job a serious legal department is to ensure that such documents are kept tightly in case of a legal suit. Yet Ms Kasule and her juniors in the legal department where all ignorant about the whereabouts of several documents during COSASE probe.
Kasule during COSASE surprised MPs when she told them that former Minister of Finance, the late Jehoash Mayanja Nkangi closed bank (names withheld) by way of issuing a press release. She would be challenged by the then COSASE Chairman Abdu Katuntu who reminded her that a press release is not a government document officially used in the closure of any institution.
Use of conflicted lawyers in BoU case
The Commercial court in December 2017 disqualified Bank of Uganda (BoU) lawyers from sh397 billion case involving Sudhir Ruparelia, citing conflict of interest. In his ruling, the head of the division, Justice David Kutosi Wangutusi stated that David Mpanga of A.F. Mpanga Advocates and Timothy Masembe of MMAKS Advocates acted in violation of the Advocates (Professional Conduct) regulations in representing BoU.
There is no one else to blame for this situation it’s BoU’s legal department and Kasule that should have done a due diligence on A.F Mpanga Advocated and MMAKS Advocates. Of concern is that taxpayers continue to lose money in such arrangements dues to carelessness of BoU’s legal department.
Crane Bank In Receivership suit against Sudhir and Meera Investment
Just weeks, Commercial Court judge, Justice David Kutosi Wangutusi ruled that Crane Bank In Receivership which sued Sudhir Ruparelia and Meera Investments Limited for Shs397 billion violated the law which does not give companies such circumstances to sue. Justice Wangutusi awarded Sudhir and Meera Investments Limited costs of the suit. It was upon BoU’s legal department to know that Crane Bank in Receivership had no right to sue, as per the existing law.
Kasule’s department also failed to let her bosses at BoU to know that that even if Crane Bank In Receivership had the right to sue, it had ceased to own property and not existence.
“That notwithstanding even if Crane Bank In Receivership could sue, by the 30th June 2017 when they filed the suit they were not in a position to do so. They had ceased to own property and their liabilities and assets had all been exhausted,” said the judge in his ruling.
The sum total is that the Respondent at the time it filed this suit was not in existence its lifetime having been terminated when it was surrendered to DFCU Bank whose consideration was the DFCU assumption of the Respondent’s liabilities which assumption was paid by conveying her assets to DFCU Bank, added the judge.
Interesting it is Kasule who swore an affidavit on behalf of BoU who helped Crane Bank In Receivership to lodge a case against Sudhir and Meera Investments. That decision by Kasule made the judge to award costs of the suit to Sudhir, which BoU has to pay. But we know BoU uses taxpayers’ purse. So we shall lose that money because of BoU’s legal department’s carelessness in handling legal issues.
“I am an adult female Uganda of sound mind and the Legal Counsel of Bank of Uganda which is the statutory receiver of Crane Bank Ltd in Receivership and I swear this affidavit in that capacity,” Kasule swearing an affidavit in Shs397 billion case.
From the foregoing Justice Wangutusi said: “There is no doubt that the suit was filed by Bank of Uganda. Since section 96 of the Financial Institutions Act insulated Crane Bank under Receivership from court proceedings, execution or other legal processes the person that should pay costs should be the person who instituted the suit and that is Bank of Uganda. This is so because Crane Bank in Receivership had no capacity to foot the costs and much so the Bank of Uganda that instituted the suit was aware of this incapacity.”
The Crane Bank case is just one example, shareholders of National Bank of Commerce and a few others have considered a legal battle to have their bank restored or be compensated. BoU’s legal department still will carry the blame for not advising rightly. The weakness of the department is the reason BoU relies more on the expensive external lawyers who dupe taxpayers. The question arises as to why Kasule still remains BoU legal counsel.
