Aruu County Member of Parliament, Samuel Odonga Otto has castigated the Inspector General of Government (IGG) Irene Mulyagonja for ordering Internal Security Organisation (ISO) to investigate him and three other MPs who were on Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) as it probed Bank of Uganda over the controversial sale of seven commercial banks.

IGG Irene Mulyagonja in her latest letter asked ISO particularly to investigate the former chairperson of Cosase committee Abdu Katuntu for allegedly soliciting bribes during the recent probe into the irregular sale of commercial banks.

The directive by the IGG is based on a complaint from an undisclosed person, that Katuntu, the former parliamentary committee on Commissions, Statutory Authorities and State Enterprises (Cosase) deputy Anita Among, Kasilo County MP Elijah Okupa, and Aruu North MP Odonga Otto regularly met former Crane bank owner Sudhir Ruparelia during the course of the bank probe.

“I don’t care who is to investigate me; ISO, CMI, IGG, police, Arrow Boys or Flying Squad,” Otto said when contacted to respond to the impending investigation.

The MP said what he cares about is, “How the mafias are seemingly taking over the country that the IGG is now more interested in those investigating the thieves and no the thieves.”

He was one of the vocal MPs during the probe of BoU officials, tasking them to explain them how they could lose key documents related to sale of banks and their assets.

It is alleged that the said Otto and other committee members received cash payments from Ruparelia and his son Rajiv Ruparelia which is suspected to be the real reason they refused to yield the leadership of Cosase when their term ended, according to the letter by the IGG.

The whistleblower accuses Katuntu of receiving a bribe of Shs 400 million from BoU Governor Emmanuel Tumusiime Mutebile, to allegedly enable the same committee to carry out a benchmarking exercise with other central banks. But, according to the whistleblower that money was not declared by Katuntu and not accounted for.

The whistleblower alleges that the compromising bribe was one of the reasons why the governor was allegedly allowed to pretend that he knew nothing about the closed banks and was never put on oath and was not clearly examined like other Bank of Uganda officials.

The request for investigations into Cosase members was confirmed by the speaker Kadaga after receiving a copy of the letter which is addressed to the director general of ISO, Col Kaka Bagyenda. She said that the letter dated February 19, 2019, would be availed to the Prime Minister Ruhakana Rugunda.

Padyere County MP Joshua Anywarach had earlier demanded that the prime minister pronounces himself on the letter which he said was deliberately meant to tone down the report on the irregular sale and closure of commercial banks. Katuntu is also being investigated for his interests in the defunct Global Trust bank.

“Hon Abdul Katuntu was one of the debtors of Global Trust bank at the time when the bank was closed on 25th July 2012. He owed the bank approximately Shs 180,000,000, a matter he did not declare yet the debts were amongst the causes of the bank’s collapse,” further reads IGG’s letter.

Mulyagonja concludes that her office decided that ISO is in a better position to investigate the allegations. She requested Col Bagyenda to file a copy of a report of their findings and action taken on the conclusion of the investigation.

Meanwhile, Speaker Rebecca Kadaga, who received the letter protested, saying that it violated the doctrine of separation of powers.

“I will give it to the Prime Minister but this is really a breach of a separation of powers,” she said.

The doctrine of separation of powers essentially means that in the course of doing their work, the three organs of government: legislature, judiciary and executive, must not interfere in the affairs of others.

Cosase) last year started investigations into the sale of 8 banks including Teefe Trust bank, International Credit bank Ltd, Greenland bank, Uganda Cooperative bank, National Bank of Commerce, Global Trust bank and Crane bank Ltd and the report was handed over last week to the speaker of parliament.

However, in a February 19 2019 letter to the ISO, Director General, the IGG says her office received a complaint of allegations of misconduct by members of the Cosase committee while carrying out their probe into the sale of eight banks.

It has now been established that the complaint was lodged by some of the senior officials of Bank of Uganda and is a continuation of the abrasive fight between some officials in Bank of Uganda and some MPs.

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To clean the mess that has engulfed Bank of Uganda (BoU), President Yoweri Museveni has reportedly directed auditing firm Ernst & Young (EY) to restructure the regulator of the country’s banking industry so as to restore public confidence, Eagle Online can reveal.

According to sources, EY will work alongside the BoU Governor Emmanuel Tumusiime-Mutebile to reorganize the institution in the process that will usher in sweeping changes in the bank’s human resource recruitment as well as modification in the organizational structure.

Tumusiime-Mutebile is expected to retire at the end of the exercise that should scare top officials at the institution that needs overhauling as soon as possible given the COSASE report which pointed out for example the separation of the management role from the supervision role that is played by the board directors. Tumusiime-Mutebile and his deputy Dr Louis Kasekende are Chair and Vice Chair of the board respectively, an arrangement MPs said causes conflict of interest.

Sources say Museveni’s decision is a result of the recent probe by parliament’s Committee on Commissions, State Authorities and State Enterprises (COSASE) probe and report on BoU which exposed the rot in the central bank whereby senior officials were accused of running the affairs of the bank as if they were running their own enterprises.

Particularly BoU top officials were accused of doing work for instance in the closure of seven banks between 1993 and October 20, 2017 without keeping records such as minutes of meetings, quarterly evaluation reports for the liquidated banks, ledgers as well as other documents.

All the directors from supervision department, banking department, legal department, archives as well as security department showed signs of incompetence as they could tell former COSASE let by Abdu Katuntu on the whereabouts of key documents related to the closure of banks such as Teefe Trust Bank, Greenland Bank, International Credit Bank, Cooperative Bank, National Bank of Commerce, Global Trust Bank and Crane Bank Limited.

Meanwhile, a source says Museveni has asked the Minister of Finance to look for suitable individuals for appointment as Board of Directors of BoU but this will require the amendment of the Constitution and BoU Act which say the Governor and his deputy must lead the Board. As such the ministry has been ordered to draft amendments of the Constitution, BoU Act and Financial Institutions Act.

It is said Museveni is also interested in having changes at the Ministry of Finance, following evidence that it did not supervise BoU to the extent that the ministry never received any reports on the closure of banks.

Cabinet is expected to discuss COSASE report after parliament makes final recommendations to government.

A source said Museveni is not happy with the events at BoU and would want officials who gained from the closure of banks to be punished.

Some of the BoU staff expected to lose their jobs include; Ben Sekabira (Director Financial Markets Development Coordination), Margaret Kasule (legal counsel), Kasekende.

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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.

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”

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