The former Central Bank Executive Director in charge of Supervision Justine Bagyenda has been accused of usurping the powers of the Legal Department, in her ploy to sell off Crane Bank Limited.
The accusation came after reports that Bagyenda engaged external lawyers from MMAKs Advocates to offer financial advisory services on the closure of Crane Bank Limited without the involvement of the Legal Department in Bank of Uganda.
On Tuesday, BoU officials appearing before the same committee, failed to defend the Shs900m paid to MMAKS advocates for external legal advice during Crane Bank sale.
MMAKS Advocates were paid Shs914.2bn for legal advice during CBL intervention, resolution and advice on the sale of CBL assets and assumption of liabilities.
The firm would further be paid extra Shs3 billion as 5 percent commission on monies recovered from CBL shareholders. The MPs contend those payments were exaggerated to benefit some BoU senior staff involved in the sale of CBL.
The former Executive Director of Bank supervision at BoU, Justine Bagyenda failed to convince the legislators on the business MMAKS did with BoU as some records were missing. Committee chairman Abdu Katuntu said it was wrong for BoU not to have records on the particular transaction.
Bagyenda read to the MPs a memo/document of November 30, 2016 requesting for payment of the lawyers without showing the work that was done. BoU governor would on December 12, endorse and approve the request for payment of over US$51000 dollars as part of their total fee.
The law firm was hired after on October 28, 2016, BOU engaged PWC to carry out a forensic review of Crane Bank Limited (CBL) focusing on a 48-month period before statutory management which was completed on January 13, 2017.
On November 28, 2016, BOU engaged MMAKS Advocates to provide transaction advice to take over CBL and the firm would on December 9, 2016, on behalf of BoU, invite 13 bidders to bid for the purchase of assets and assumption of liabilities of CBL. Between 12th and 15th December 2016, BOU issued the Inventory report to 6 bidders after signing a confidential agreement with them to undertake due diligence on the assets and liabilities of CBL. Subsequently on 20th December 20, 2016, two bids were received and evaluated.
The costs to MMAKS are part of the Shs12 billion intervention costs BoU claims to have sunk in CBL during the takeover.