By Andrew Irumba
Kampala: Two city law firms-Bowmans and MMAKS advocates that were controversially paid exorbitant legal fees by Bank of Uganda (BoU) to offer legal advice during the takeover of Crane Bank by BoU now faces fresh legal suit,Spy Uganda repots.
A concerned citizen known as Steven Masanso wants sacked former Buganda Kingdom Attorney General, David Mpanga, the leading partner at Bowmans advocatesa and Timothy Masembe Kanyerezi, senior partner at MMAKS advocates (Masembe, Makubuya,Adriko, Karugaba & Ssekatawa) vomit Uganda tax payers’ money worth Shs25billion allegedly paid to them to offer legal advice to BoU during Crane Bank over.
It should be recalled that Bank of Uganda paid about Uganda shillings 25 billion as legal fees for external lawyers.
Whereas BoU spent such huge sums of money in the closure of defunct Crane bank, the report by parliament’s committee on commissions, statutory authorities and state enterprises (COSASE) revealed that the sale of crane bank violated the Financial Institutions Act of 2004,infact the report recommended for a compensation for all losses incurred.
Also, it was noted that Bank of Uganda didn’t have minutes of negotiation meetings with the said external lawyers. External lawyers also drew their terms of reference themselves.
In a demand notice cum notice of Intention to sue dated February, 28, 2019 to the two law firms Bowmans and MMAKS advocates, a copy of which he copied President Yoweri Museveni, IGP Martins Okoth Ochola,Finance Minister Matia Kasaija,CID Director Grace Akullo and BoU legal department, Masanso makes a series of demands of which failure to honor will now force him to proceed to lodge both civil and criminal proceedings against the duo.
“As you are aware, it’s on record that as part of the resolutions of various banks, of which facts are well with in your knowledge, you continually received various monies in collusion with individual Bank of Uganda officials which sums were charged on received banks. You also routinely billed way beyond permissible scale and in instances for no work done at all. A case In point is with respect on the monies taken out as legal fees for purported drawing of the Crane bank sales agreements even when it clearly showed having been drawn by the Legal Department of Bank of Uganda,” stated part of his letter.
Mr Masanso further contends thus; “You accordingly offered no consideration and per took in an illegal and criminal enterprise”.
He also accuses MMAKS of performing a regulatory coup variously significantly advising the banking regulator while at same time sitting on different boards of regulated commercial banks and/or acting for them.
According to Masanso for instance, in the case of CBL, the lawyers acted without authority of the board and the legal department.
All the actions of the advocates were construed in bad faith, self-interest and usurped the constitutional powers of the regulator.
The complainant now demands that the accused firms publishes an apology in the nations media, refund of all illegally levied fees failure of which will attract both criminal and civil proceedings.
According to Masanso, It is evident that the work of regulating Commercial banks had been usurped by external legal advisors who acted for and on behalf of other banks while performing roles for Bank of Uganda.
It should be remembered that three top advocates of MMAKS are also board directors of 3 different banks. Timothy Masembe, the MMAKS Managing Partner is a board chairman of NC Bank, while Moses Adriko is a board member for Standard Chartered Bank.
Nelson Makubuya also sits on the board of Equity bank whose majority shareholder is Arise B.V with 11.99%. Arise BV is also dfcu Bank’s majority shareholder which bought the defunct crane bank limited at ugx 200 billion.
Conflict of Interest
AF Mpanga (Bowmans) Advocates have been variously involved with BoU, dfcu Bank and Crane Bank.
Bowmans who are dfcu Bank’s official external lawyers had also been handed a mega contract by BoU to represent Crane Bank (in liquidation) in a case filed against Sudhir Ruparelia; Crane Bank’s former shareholder, but were thrown out, by the high court over conflict of interest.
Bowmans, also advised Price Water house Coopers (PWC) during their BoU-sanctioned forensic audit on Crane Bank, during which time they had access to confidential commercial information about Crane Bank, information if passed on to dfcu would give them competitive leverage over the other banks that would later bid to buy the troubled CBL.
