Should Margaret Kaggwa Kasule continue her role as head of legal affairs at the central Bank?

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Just within a space of one year, the central bank has lost many legal suits and among them is the one that they lost against businessman Dr. Sudhir Ruparelia. In this case, the central bank was faulted for fielding a weak legal team.

A few weeks ago Justice David Wangutusi of Commercial dismissed a case in which Bank of Uganda (BoU) claimed that Mr. Ruparelia and his Meera Investments Ltd claimed that he fleeced his own Crane Bank Ltd (now in receivership) of UGX397 billion.

On advice of the internal legal team headed by Ms. Kasule, BoU, after closing Crane Bank, sought to recover UGX.397 billion from him and 48 land titles that housed former Crane Bank branches, saying he had illegally taken them out of the bank.

But in his 22-page ruling, Justice Wangutusi noted that at the time BoU and Crane Bank (in receivership) filed the suit against Mr Ruparelia and his Meera Investments in January 2017, Crane Bank was a non-existing entity, having been terminated when the Central Bank sold its assets to DFCU Bank in October 2016. The judge ruled that this rendered Crane Bank in receivership incapable of suing or being sued since there would be no assets to be claimed for.

The central bank’s legal department has also been faulted for always hiring services of external lawyers even when some of them are not by law allowed to represent the bank.

For example, the High Court in April declared Sebalu & Lule Advocates unfit to represent the Central Bank in any commercial disputes against Mr Ruparelia. In 2017, the Commercial Court also disqualified city lawyers Kanyererezi Masembe and David Mpanga from the UGX. 397b Sudhir Ruparelia’s case against Bank of Uganda (BoU), also citing conflict of interest.

In his ruling delivered on December 21, 2017, Justice Wangutusi stated that Mr. Mpanga of A.F. Mpanga Advocates and Timothy Masembe of MMAKS Advocates acted in violation of the Advocates (Professional Conduct) regulations.

Legal commentators have always wondered why the central bank legal team could fail to interpret such important aspect of the law that has in the process cost BoU huge amounts of money.

During a recent investigation in the controversial sale and closure of seven commercial banks by Parliament’s committee on Commissions, Statutory Authorities and State Enterprises (Cosase), it was discovered that former BoU director for supervision Justine Bagyenda engaged external lawyers from MMAKS Advocates at UGX930 million to offer financial advisory services on the closure of Crane bank without the involvement of the Bank of Uganda’s legal department.

The commercial law firm co-owned by Apollo Nelson Makubuya, Timothy Kanyerezi Masembe and Moses Adriko received a payment of $251,045 (about UGX930 million) for its financial advisory services. The payment was reportedly approved by BoU governor Emmanuel Tumusiime-Mutebile following a memo seeking the approval by Ms. Bagyenda.

Interestingly, Ms. Kasule denied any involvement in the matter, saying that her department was never involved in the process.One wonders her relevancy in the central bank if such risky dubious deals can go on without her office knowing.

The MPs on the Cosase committee were astonished to learn that the external lawyers drafted their own terms of engagement with the central bank. MPs discovered that in four successive Financial Years, the committee heard that top city law firms, including MMAKs Advocates were paid more than UGX1.4b, with an accrued balance of UGX15.8b.

The BoU matters handled by hired lawyers include representation in different court cases and offering legal opinions and processing of land documents on orders of head legal Ms. Kasule. The MPs then said it was untenable to provide for a legal department when most of the legal work is done by private lawyers.

They called the disputed hiring of private lawyers as “a money-making venture” and called for an investigation into the deals.

The central bank’s legal director, Ms Kasule failed to convince MPs on how she arrived at a decision to hire private law firms as they continued to question her explanation on account of the various cases BoU officials sent to private lawyers.

Ms. Margaret Kasule’s position as head of legal at Bank of Uganda (BoU) should be put under close public scrutiny as the Central Bank is continuing to lose several commercial legal battles that have destroyed its public image.

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