City legal firm is on the spot after the recently released report Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) on closure of seven defunct banks accused it of conflict of interest.<\/p>\n\n\n\n
One of the findings of the report puts on the spot legal\nfirm MMAKS for its alleged conflict of interest in the closure of some of the\nbanks.<\/p>\n\n\n\n
\u201cThis is a probe meaning bringing facts on table. This isn\u2019t\ncourt of law where we are going to write and convict people. That anger we will\nhave it and we will have to measure it,\u201d Abdu Katuntu, the Bugweri County MP\nwho also chaired the committee said, adding that they have 43 recommendations\nin the report.<\/p>\n\n\n\n
\u201cThe worst about it is that the external lawyers are\nactually directors of commercial banks so how do you get directors to be\nprinciple legal advisors of the central bank against another bank. In\neconomics, it is called regulatory capture. BOU has eleven lawyers all with\nmasters yet even simple things like drafting agreements they are going to\ncommercial lawyers. The issue of BOU hiring external lawyers should be done in\nrarest of circumstances and Board must be involved,\u201d he revealed.<\/p>\n\n\n\n
MMAKS ON THE SPOT<\/p>\n\n\n\n
MMAKs Advocates is co-owned by Apollo Nelson Makubuya,\nTimothy Kanyerezi Masembe and Moses Adriko. It is a commercial law firm,\ndealing in matters relating to banking, corporate and commercial law,\nacquisitions and intellectual property among others.<\/p>\n\n\n\n
During the investigations, Katuntu discovered that while the\nCentral Bank hired MMAKS Advocates to provide legal services, which led to the\nclosure of the banks, some of its staff was directors in different commercial\nbanks.<\/p>\n\n\n\n
A case in point is the closure and sale of the National Bank\nof Commerce (NBC) in 2012. The negotiations were conducted by a team consisting\nof the former BoU Executive Director Supervision Justine Bagyenda, Legal\nCounsel, Margaret Kaggwa, the former Crane Bank Managing Director, A. R. Kalani\nand Timothy Kanyelezi Masembe, a lawyer from MMAKS Advocates.<\/p>\n\n\n\n
COSASE then questioned the advisory role of Masembe since he\nis the Board Chairman of NC Bank. Masembe is a partner in MMAKS Advocates\ntogether with lawyer Apollo Nelson Makubuya who is Board Chairman of Equity\nBank and lawyer Moses Adriko who is on the board of Standard Chartered Bank.<\/p>\n\n\n\n
Vincent Wabwoya, the Budadiri East MP said it was just\ncommon sense for MMAKS Advocates to see that their conflict of interest for\nthem to advise the Central Bank and also remain legal advisors to different\ncommercial banks.<\/p>\n\n\n\n
Masembe confirmed that MMAKS Advocates continued serving as\nlegal advisors to Crane Bank even when they were contracted as transactional\nadvisors by the Central Bank.<\/p>\n\n\n\n
He explained that MMAKS Advocates acts for different banks\non an adhoc and retainer basis, saying that if they act for one bank under this\narrangement, it doesn\u2019t stop them for advising another bank. He however said\nthat working on a retainer basis, which was the case with the Central Bank was\nsomething different.<\/p>\n\n\n\n
In relation to being directors of different commercial banks\nand their contract with the Central Bank, Adriko said that none of the\ncommercial banks on whose boards they served expressed interest in any of the\nclosed commercial banks.<\/p>\n\n\n\n
COSASE established that Masembe and his MMAKS Advocates\npocketed tax payers\u2019 money amounting to shs4.2bn in the sale of Crane Bank\nwithout any documentation or receipts.<\/p>\n\n\n\n
Masembe\u2019s MMAKS Advocates were paid Shs914, 272,722 for\nlegal advice during CBL intervention, resolution and advice on the sale of CBL\nassets and assumption of liabilities.<\/p>\n\n\n\n
The firm would further be paid extra Shs3 billion as 5%\ncommission monies recovered from CBL shareholders.<\/p>\n\n\n\n
While meeting COSASE, MPs asked for records or minutes from\nthe meetings between MMAKS Advocates and Bank of Uganda which culminated to\ndisbursement of such monies.<\/p>\n\n\n\n
However, Masembe could not avail any minutes or documents\nregarding the payments saying that \u201clawyers don\u2019t take minutes of meetings and\nin any case, the minutes should have been recorded by the Bank of Uganda.\u201d<\/p>\n\n\n\n
\u201cHow can shs4.2bn of tax payers\u2019 money be given for legal\nadvice without any minutes? This is ridiculous,\u201d MP Odonga Otto said during the\nhearings.<\/p>\n\n\n\n
COSASE Chair Abdu Katuntu also found it strange for a public\ninstitution to advance massive payments to a private law firm without any\nminutes for reference.<\/p>\n\n\n\n
\u201cWe need minutes of such meetings with the Central Bank that\nshow the kind of legal opinion that you gave to the Central Bank. As a public\ninstitution, how does one say this was a proper payment?\u201d Katuntu said.<\/p>\n\n\n\n
Neither Bank of Uganda nor Masembe have produced documents\nshowing their terms of reference in offering legal opinion in the sale of Crane\nBank.<\/p>\n","protected":false},"excerpt":{"rendered":"
City legal firm is on the spot after the recently released report Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) on closure of seven defunct banks accused it of conflict of interest. One of the findings of the report puts on the spot legal firm MMAKS for its alleged conflict of interest in the […]<\/p>\n","protected":false},"author":2093,"featured_media":8413,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_paywall_metabox":[],"jnews_override_counter":[],"footnotes":""},"categories":[98],"tags":[31],"class_list":["post-8412","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-featured"],"yoast_head":"\n