By Max Patrick Ocaido
Bank of Uganda (BoU) reportedly paid a private law firm- MMAKS Advocates a whopping Shs4.2bn without any single documentation or record of the minutes.
This was established by the Parliamentary committee on Commissions, Statutory Authorities and State Enterprises (COSASE) that was on Tuesday evening interacting with key witnesses from MMAKS Advocates led by lawyer Timothy Masembe.
Masembe's MMAKS Advocates were paid Shs914, 272,722 for legal advice during CBL intervention, resolution and advice on the sale of CBL assets and assumption of liabilities. The firm would further be paid extra Shs3 billion as 5% commission monies recovered from CBL shareholders, bringing the total to Shs4.2bn.
While meeting COSASE, MPs asked for records or minutes from the meetings between MMAKS Advocates and Bank of Uganda which culminated to disbursement of such monies.
However, Masembe could not avail any minutes or documents regarding the payments saying that "lawyers don't take minutes of meetings and in any case, the minutes should have been recorded by the Bank of Uganda."
"How can shs4.2bn of tax payers' money be given for legal advice without any minutes? This is ridiculous," MP Odonga Otto said.
COSASE Chair Abdu Katuntu also found it strange for a public institution to advance massive payments to a private law firm without any minutes for reference.
"We need minutes of such meetings with the Central Bank that show the kind of legal opinion that you gave to the Central Bank. As a public institution, how does one say this was a proper payment?" Katuntu said.
Neither Bank of Uganda nor Masembe have failed to produce documents showing their terms of reference in offering legal opinion in the sale of Crane Bank.
Kiruhura Woman MP Sheila Maine suggested that MMAKS Advocates first returns the monies paid to them until they prove with receipts how they monies were given to them and also present evidence of the kind of legal opinions that they offered to Bank of Uganda to deserve such an exorbitant pay cheque.
MP Mwine also raised a matter of conflict of interest claiming that it was wrong for MMAKS Advocates to offer legal advice to the Central Bank against the sale of Crane Bank who are their clients.
In response, Masembe refuted any claims of conflict of interest saying that the Financial Institution Act does not bar them from representing more than one commercial bank unless a specific bank is paying a retainer fee.
“We act for Dfcu and many other banks. Once you accept a retainer then you can't act against that bank, but in this case [of Crane Bank], it was not a case of retainer so even the FIA does not bar us from representing more than one bank,” Masembe said.
