BoU Tasked to explain foreign currency payment to MMAKS Advocates

Kampala, Uganda | THE INDEPENDENT | Bank of Uganda (BoU) Officials have been tasked to explain external lawyers were paid in a foreign currency despite filing invoices in Uganda shillings.

The lawyers from MMAKS Advocates were paid $230,000, which translated into sh759 million at the 2017 exchange rate, for services relating to the transactions by the Central Bank in the closure and sale of Crane Bank Limited. The law firm is run by city lawyers Apollo Makubuya, Timothy Kanyerezi Masembe, Moses Adriko, Mathias Ssekatawa, Ernest Ssembatya and Isaac Walukagga.

Part of the money, amounting to $93,872 was the bill computed on services offered on an hourly basis. According to one of the legal firm’s partners Timothy Masembe Kanyerezi, the bill was based on a blended Partner/Associate rate of $217 per hour.

The rest of the bill, totalling $136,128 was payment for drawing and negotiating the terms of the Purchase of Assets and Assumptions of Liabilities Agreement. It was based on the sh200 billion cash consideration for Crane Bank assessed at a discounted rate of 0.24 per cent.

On Wednesday, the parliamentary committee that is probing the irregular sale of commercial banks tasked the Central Bank team led by Governor Emmanuel Tumusiime Mutebile to explain why the payment was made in a foreign currency. The legislators accused Bank of Uganda of showing no confidence in Uganda’s currency on top of advancing payments without evidence for work done.

Aruu North MP Odonga Otto tasked Deputy Governor Louis Kasekende who approved money for Crane Bank liquidity support to provide the legal instrument he used to authorize the payments. He also demanded for minutes of the meeting justifying the amount paid out.

Mbarara Municipality MP Michael Tusiime said that the payment was in contravention of a guideline by the Secretary to Treasury Keith Muhakanizi; warning all accounting officers against paying contractors in foreign currencies, save for contracts that were running before the time of the directive issued in 2016.

Tusiime insisted that Kasekende explains why local contractors were paid in foreign currency despite a ban from the Treasury. Kasekende denied approving the payment in Dollars but added that the cited letter was addressed to accounting officers in local governments.

Committee Vice-Chairperson Anita Among and Abraham Byandala, one of the committee members questioned whether the Central Bank makes its budgets in local currencies or foreign currency, to which Kasekende said that their budget is drafted in the local currency.

Yusufu Mukiibi, the BoU acting Chief Accountant said that the money paid out to the lawyers in US dollars was a commission to lawyers who recovered money from Crane Bank shareholders from the foreign reserves. He said that their office acts on approved instructions from management.

The Committee directed the Bank of Uganda (BoU) to provide a written response.

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