Advertisement

Uganda MPs probe central bank over $390,000 fees to private lawyers

Wednesday September 20 2017
Bou

Bank of Uganda officials led by the Governor, Mr Emmanuel Tumusiime-Mutebile (2nd right), before the Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises on Tuesday. PHOTO | ALEX ESAGALA | NATION

By MONITOR

Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) is investigating Bank of Uganda over payment of legal fees to private law firms, despite having a full-fledged legal department.

The committee heard that top city law firms were paid more than Ush1.4 billion (about $390,000), with an accrued balance of Ush15.8 billion ($4.4 million).

The BoU matters handled by hired lawyers include representation in court cases and offering legal opinions and processing of land documents.

The Committee chairperson, Abdu Katuntu (Bugweri, FDC) on Tuesday grilled the central bank officials on the rationale of having a legal department and then hiring private lawyers. 

The MPs, who are currently scrutinising the Auditor-General’s reports on the BoU, described the expenditure as uncalled for.

“Who makes the decision that this case has to be referred to the legal counsel outside?” Mr Katuntu asked.

Advertisement

MPs who spoke to Daily Monitor after the meeting termed the hiring of private lawyers a “a money-making venture” and called for an investigation into the deals.

The central bank’s legal director Margaret Kaggwa Kasule, however, said that the decisions on which cases are handled by the contracted lawyers are taken with a consideration of the “complexity of the matter.” 

“That decision is taken by the legal counsel through internal consultation with the lawyers. It depends on the complexity of the matter and a number of other issues,” Ms Kasule said.

Mr Katuntu asked why “even a caveat” is placed by external lawyers, to which Ms Kasule responded that “the issues of land office outsourced.”

Anita Among (Bukedea, Ind) said in their next sitting, the central bank will be required to present “a budget for internal and external operations.” 

“We also need a list of your contracts [with external lawyers] and a list of all the advocates,” she added.

BoU officials have also been asked to present the budget for MMAKS Advocates and AF Mpanga Advocates, the external lawyers representing BoU in the Crane Bank case against city tycoon Sudhir Ruparelia. 

READ: Trial pitting BoU against ex-Crane Bank owner begins

Mr Ruparelia accuses the two legal firms contracted by BoU of conflict of interest. The case is pending before the Commercial Court.

Mr Katuntu ordered BoU Governor Prof Emmanuel Mutebile, who was silent throughout the sitting, to provide the terms of engagement with the law firms.

“Bring the terms of engagement with legal firms, we want to see the performance of your legal counsel. Do a quick audit of cases you won and those you lost and the costs you recovered because the cases you win,” said Mr Katuntu.

Mr Katuntu also asked the central bank officials to produce its legal department’s itemised annual budget in Wednesday sitting.

Documents seen by the Daily Monitor show that one law firm received Ush62 million ($17,000) as “balance on agreed instruction fees and value added tax.”

Another firm received Ush31 million ($8,600) for “obtaining planning permission in respect of plot 15-17 Birch Avenue.”

Mr Katuntu said the legal department will have to justify its existence in view of the amounts paid out to the external law firms.

Mbarara Municipality MP Michael Tusiime said that whereas BoU is hiring private lawyers, their land in parts of Mbarara “has been encroached on.” The central bank undertook to investigate the claim.

In the 2016/2017 financial year, external lawyers received Ush300 million ($83,450), with an outstanding balance of Ush2.9 billion ($806,700).

For FY 2015/2016, Ush387 million ($107,650) was paid out, leaving a balance of Ush8.8 billion ($2.4 million).

In FY 2014/2015, Ush681 million ($189,400) was paid out, with Ush4.1 billion ($1.1 million) outstanding while in FY 2013/2014, Ush61 m ($17,000).

Advertisement