By Wafula Malik
BoU leaked internally exchanged correspondences betray hitherto very powerful Justine Bagyenda’s relentless efforts to ensure that top city law firm MMAKS continued being engaged to lucratively offer legal services to Bank of Uganda. The correspondences show that Bagyenda remained relentless even after BoU Governor Prof Emmanuel Mutebile wrote to Central Bank Legal Counsel Margaret Kasule raising tough questions regarding why BoU continued to retaining and giving frequent assignments to such an expensive law firm. In his March 22nd letter, which is just one of the many correspondences exchanged on the matter, Mutebile required Kasule to write for him a brief profiling all the Crane Bank-related legal matters that were being handled by external lawyers including MMAKS. On 26th March, Kasule complied prompting Mutebile to read out the Riot Act for BoU top management regarding the ever skyrocketing legal expenses splashed on external lawyers. Coincidentally the Auditor General John Muwanga too raises red flag on these very exorbitant legal expenses in his latest report on BoU’s performance regarding the closed commercial banks. Mutebile in his communication expressed fury about what he called “exorbitant” legal fees MMAKS was charging the Central Bank. In reference to the Crane Bank saga, Mutebile wondered why MMAKS a top law firm with which BoU had had a long running client-attorney relationship (complimented with a generous monthly retainer) was imposing “unreasonably” very high legal fees for the work done on the Crane Bank matter. Mutebile said he expected MMAKS to be remunerated basing on number of hours put in, actual costs incurred and reimbursable fees as opposed to insisting on 5% of the subject matter at hand. He also made reference to the Ismail Dabule case over which he was being pushed as Governor to clear the payment of $590,000 (roughly Shs2.5bn) in favor of MMAKS. He directed that in future, where such huge legal fees claims are likely to result, top management members should be adequately involved to ensure legal fees claimed aren’t curiously very exorbitant. He argued that this was good to strengthen accountable and transparent practices at BoU.
Mutebile showed discomfort with the MMAKS monopoly and directed that firms should be engaged in rotation as opposed to one firm monopolizing all the big deals. He was also discomforted seeing MMAKS claims being computed in dollar as opposed to local currency. Later in June, Mutebile was indifferently presented with another even larger bill whereby he was being required to approve payment of $847,175 (roughly Shs3.5bn) to the same law firm whose monopoly he had previously complained about. This was in regards to legal fees for recovering cash from Crane Banker shareholders. Mutebile later said he approved this payout because matters relating to the resolution of the Crane Bank saga were urgent. He nevertheless demanded that in future, the 5% commission the firm was paid in this case should be diminished downwards on grounds that 5% was very outrageous for a firm that already was being entitled to a monthly retainer. A clearly shaken BoU Legal Counsel Margaret Kasule originated a communication indicating that all future determination of MMAKS payments was to have the Governor’s personal approval. Bagyenda wouldn’t have any of that. She insisted that matters relating to Crane Bank would remain peculiar and an exception to the Governor’s latest directive (for personal approval) would apply. She indicated to Kasule justifying the waiver thus: “Today [29th May] I discussed with Governor relating to Crane Bank Limited in receivership.” She added that she had secured the Governor’s concurrence to the effect that “Crane Bank matters that MMAKS Advocates are handling” wouldn’t be subjected to the new arrangement requiring rotation of lawyers. For some unclear reason, this Bagyenda communication wasn’t brought to the attention of the Governor. Sudhir subsequently referred matters to court arguing it was procedurally improper for MMAKS to represent BoU in the case regarding his CBL because the same firm had previously served as legal advisors to his business empire Crane Bank inclusive. MMAKS had been hired by BoU to oversee the central bank takeover of his CBL which eventually was sold to DFCU at a figure (Shs200bn) which the Auditor General disputes given the colossal sums that were injected into the whole process (over Shs470bn) including the billions MMAKS and other law firms were paid for their services. Some of these firms were close to PWC forensic auditing process on which BoU relied to conclude that Sudhir had defrauded his own CBL to the tune of $80m. Basing on the PWC audit discovery, BoU levelled three allegations against Sudhir and other CBL shareholders. These included fraudulently taking away close to Shs350bn from CBL, dubiously transferring ownership of 48 CBL bank branches to MERA investments which is another Sudhir Group entity and defaulting on the mandatory NSSF remittances amounting to Shs52bn. Sudhir denied all these and subsequently used court to successfully dispute the curious relationship between BoU, MMAKS and other law firms. Court agreed with him and prohibited MMAKS from representing BoU in CBL-related matters on grounds there was clear conflict of interest because the same firm had previously covered Sudhir meaning in their possession, was lots of confidential information that could easily be used to Sudhir’s own detriment (the court decision has since been appealed by the affected law firms as erroneous). BoU nevertheless shifted to using Sebalu Lule Advocates which must be one of the very few big name city law firms that have never done work for Sudhir’s larger than life business empire. Some time back, President Museveni convened a meeting at Entebbe State House seeking to be updated on how far the parties had gone with the amicable settlement which he advised. At the meeting were lawyers from MMAKS law firm, something that indicated determination to stick with BoU regarding the CBL matter. State House sources say that Sudhir later brought to the President’s attention his concerns that the MMAKS lawyers were blossom buddies of his CBL foe Bagyenda and were an obstacle to amicable resolution of the conflict with BoU in favor of full blown court proceedings intended to have him humiliated and criminally prosecuted in the end. Sudhir indicated to the big man that he was tired of being ransomed to sign onto the Consent Judgment (many of whose terms he wasn’t comfortable with) in order to escape BoU-spearheaded criminal prosecution. Museveni agreed this wasn’t good for the dialogue he wanted to see between the parties involved. For comments, call/text or whatsapp us on 0703164755.
