BOU: Lawyers of MMAKS Advocates quizzed on conflict of interest

Kampala, Uganda | THE INDEPENDENT | The Committee on Commissions, Statutory Authorities and State Enterprises-COSASE has questioned a team of lawyers from MMAKS Advocates on conflict of interest.

The team from MMAKS Advocates was comprised of Apollo Nelson Makubuya, Timothy Kanyelezi Masembe, Moses Adriko, Mathias Ssekatawa, Ernest Sembatya and Isaac Walukagga.

COSASE is investigating the closure and sale of seven commercial banks between 1993 and 2016 following a forensic audit by the Auditor General in 2017.

During the investigations, the Committee chaired by the Bugweri County MP, Abdu Katuntu discovered that while the Central Bank hired MMAKS Advocates to provide legal services, which led to the closure of the banks, some of its staff was directors in different commercial banks.

A case in point is the closure and sale of the National Bank of Commerce (NBC) in 2012. The negotiations were conducted by a team consisting of the former BoU Executive Director Supervision Justine Bagyenda, Legal Counsel, Margaret Kaggwa, the former Crane Bank Managing Director, A. R. Kalani and Timothy Kanyelezi Masembe, a lawyer from MMAKS Advocates.

COSASE then questioned the advisory role of Masembe since he is the Board Chairman of NC Bank. Masembe is a partner in MMAKS Advocates together with lawyer Apollo Nelson Makubuya who is Board Chairman of Equity Bank and lawyer Moses Adriko who is on the board of Standard Chartered Bank.

While appearing before the Committee on Tuesday, the Bugweri County MP, Abdu Katuntu questioned the group about conflict of interest. He said it appeared the directors of commercial banks captured the mandate of Central Bank to determine the fate of their competitors.

Katuntu also asked the lawyers to explain their financial advisory services to Bank of Uganda (BoU) concerning Crane Bank closure yet they were legal advisors to Crane Bank. Vincent Wabwoya, the Budadiri East MP said it was just common sense for MMAKS Advocates to see that there conflict of interest for them to advise the Central Bank and also remain legal advisors to different commercial banks.

Timothy Masembe Kanyelezi confirmed that MMAKS Advocates continued serving as legal advisors to Crane Bank even when they were contracted as transactional advisors by the Central Bank.

He explained that MMAKS Advocates acts for different banks on an adhoc and retainer basis, saying that if they act for one bank under this arrangement, it doesn’t stop them for advising another bank. He however said that working on a retainer basis, which was the case with the Central Bank was something different.

In relation to being directors of different commercial banks and their contract with the Central Bank, Adriko said that none of the commercial banks on whose boards they served expressed interest in any of the closed commercial banks.

Katuntu expressed fear the conflicted lawyers could use confidential information from the Central Bank to help the banks they represent.

In December 2018, the Central Bank Governor, Emmanuel Tumusiime Mutebile promised COSASE that they will review their policy on conflict of interest.

Mutebile said that they had discussed the matter and taken note of issues concerning conflict of interest among service providers. He said that they are to review policy on conflict of interest and take steps to upgrade their performance.

COSASE is expected to finalize the probe into the closure of the banks tomorrow with a meeting with Bank of Uganda officials to respond to allegations made by the shareholders of the defunct banks.

******

URN