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Mutebile dismisses IGG directives on Bagyenda as “redundant”; tells her off: “You cannot direct BoU on anything”

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Efforts by the sacked Bank of Uganda former Executive Director of Supervision, Justine Bagyenda to have the Inspectorate of Government quash Governor Tumusiime Mutebile’s decision to dismiss her have hit a snag, following BoU’s firm rejection of the IGG’s orders.

Mrs. Bagyenda was in a February 7 reshuffle, replaced with “immediate effect” by Dr Tumubweine Twinemanzi, a former Director of Industry Affairs and Content (economic affairs) at Uganda Communications Commission (UCC).

Several other staff were also affected by the changes.

However, Bagyenda is reported to have objected to the changes and refused to hand over office. Along with other unnamed staff, it is believed that Bagyenda appealed to the IGG, arguing that, among other issues, the said staff changes had had been illegally done, since Mr. Mutebile had acted without the authority of BoU’s Board of Directors.

The petition was also copied to the Parliamentary committee on Commissions, Statutory Authorities and State Enterprises (COSASE).

BoU’s no nonsense Governor, Prof Tumusiime Mutebile

The IGG, Mrs. Irene Mulyagonja Kakooza then, in March 12 letter, wrote directing the BoU Board of Directors not to “ratify any actions or decisions taken by the Governor on or around February 7, 2018 in relation to the impugned appointments and transfers until such time as the investigation by the Inspectorate has been concluded or until this office directs otherwise.”

Probably aware that BoU would invoke its constitutional independence, Mulyagonja further wrote that although she was aware of the independence, this would only stand “where the Bank is deemed to be acting in good faith and in accordance with the law, relevant regulations and policies and the principles of natural justice.”

Questionable directives; redundant investigations 

In a sharp but explicitly written March 19th response, the Governor rejected the IGG’s directives which he branded as “impugned” (questionable) and said the planned investigations by the IGG were “redundant” since she already had assumed bad faith on behalf of the Central Bank.

“We have reviewed the contents of the above-said communication and now write to object in the strongest terms your directive therein, stopping the board of directors from ratifying the actions and decisions taken by the Governor in relation to the appointments and transfers,” wrote Mutebile, adding: “We reiterate our previous position in our letter dated 6 March 2018, regarding the validity of the appointments but we must add that the Inspectorate does not have the mandate to give direction to the Bank of Uganda.”

In the letter copied to among others, H.E The President, the Speaker of Parliament, the Prime Minister, Minister of Finance, Attorney General, Auditor General and BoU Board Members; Mutebile said that Article 162 (2) of the Constitution, that set up BoU, disqualifies the IGG from giving any directives to the Central Bank.

Swords drawn: Former BoU Executive Director, Justine Bagyenda is at the center of a ‘constitutional jurisdiction’ fight between Governor Mutebile and IGG Irene Mulyagonja

Article 162 (2) of the Constitution, provides that: “In performing its functions, the Bank of Uganda shall conform to this Constitution but shall not be subject to the direction or control of any person or authority.

Mutebile also made sarcastic attacks on the IGG’s attempts to interprete Article 162  as “incorrect” as “it purports to read new provisions in a clear constitutional provision.”

“The Article in question is clear, unequivocal and unambiguous on the independence of the Bank of Uganda and the fact that Bank of Uganda is not subject to the direction or control of any person or authority and therefore no outsider, including your office can interfere with the decisions of the Bank of Uganda,” reproached Mutebile.

 “The raison d’etre of the Independence is not difficult to fathom. The purpose is to ensure that the Bank of Uganda is credible, decisive and to ensure macroeconomic stability and confidence in the market. This can only be achieved if the Bank of Uganda is free from external influence, direction or control. Your impugned directive to the Board not to ratify the Governor’s decisions, if implemented would have a catastrophic effect on the financial sector of Uganda and the economy at large,” Mutebile further wrote.

Mutebile also told the IGG not to mistake BoU’s earlier communication with her office regarding the staff changes as attempts to seek approval but rather a formality and a good practice with a sister institution.

“Our letter of 6 March 2018 was to clarify a position and bring your office as a sister institution of Government up to speed with the Bank of Uganda’s internal procedures regarding recruitment. It was in no way meant to subject the Bank of Uganda to your office’s control because that would be unconstitutional,” he said.

“The Bank of Uganda shall safeguard its Independence and guarantee a robust and sound financial system founded on the pillars of independence in decision making and reputational integrity. Your presumption of bad faith as a basis to take over the Board’s role presupposes you have already formed an opinion, which makes an investigation redundant. But more importantly, this presumption of bad faith undermines the Bank of Uganda reputational integrity,” Mutebile further wrote.

Previous court rulings on IGG’s powers

Mutebile took time to remind Mulyagonja, a lawyer and a former judge, about previous court rulings on the powers of the IGG, arguing that the Central Bank’s independence is a “widely accepted” principle that “has been followed by all institutions of Government in the recent past.”

“Neither His Excellency, the President nor the Parliament of Uganda have ever so brazenly directed the Board of Directors or the Governor in the manner set out in your letter. Even the Judiciary has been very careful to protect the Independence of the Bank of Uganda,” wrote Mutebile.

“We wish to point out that we are fully cognizant of your powers but we are aware that those powers have been subject to judicial interpretation,” said Mutebile.

Part of BoU letter to IGG

Mutebile among other cases quoted the Livercot Impex Ltd & Another v Attorney General & Another (MISC. CAUSE NO. 173 OF 2010) [2012] UGHC 22 (17 February 2012) in which the High Court reviewed directives of the IGG to the Uganda Land Commission.

In the ruling, Hon. Justice Eldad Mwangusya ruled that regardless of whatever powers the Inspectorate of Government derives under the Constitution, it had did not have “power to reverse a decision of the Uganda Land Commission which is also established under Article 237 of the Constitution and derives its power from Article 239 of the Constitution.”

“I also do not think that the IGG can reverse the decisions of the Commissioner Land Registration who derives her authority from the Registration of Titles Act,” ruled Mwangusya.

Basing on this ruling, Mutebile wrote that: “It is worth noting that the Uganda Land Commission does not have the same constitutional independence and protection as the Bank of Uganda.”

The Governor also told the IGG of the previous attempts to by her office to “interfere with the decisions of the Board of the Uganda Development Bank” that were again shot down by the High Court.

“Your ability to issue directives on staff matters to a Board of Directors was extensively reviewed by the High Court in MC 303 of 2013, (Patricia Ojangole & 4 others vs Attorney General). It is worth noting that the Uganda Development Bank is not a constitutionally established entity and does not enjoy the independence extended to the Bank of Uganda and yet that Board was protected from your interference by the Court,” Mutebile wrote.

In the above case, the IGG had issued directives to the Board of the Uganda Development Bank stopping them from dismissing certain officers of the bank who had been accused of corruption.

“You had purportedly taken this action in favor of those employees pursuant to your Constitutional mandate and the provisions of the Inspectorate of Government Act. The Uganda Development Bank had claimed that your actions were likely to affect its performance. You have taken a similar route against the Bank of Uganda, a constitutional body whose independence is guaranteed and protected by the Constitution, and is therefore much more protected than UDB, for obvious reasons,” wrote Mutebile.

In his ruling, Hon Mr. Justice Musota Stephen among others, held that the IGG’s directives were “illegal and an abuse of its powers as it seeks to exert influence on the board to exercise its discretionary powers” and therefore could not be allowed to stand.

Is Bagyenda running out of options?

This latest snapback from a hard-nosed Mutebile could further dim Bagyenda’s chances of a possible bounce back at BoU and or a respectable retirement.

The latest revelations about her multi-billion suspicious bank transactions over and above her unexplainable properties as well as the ongoing investigations could possibly slow down or even kill the IGG’s motivation to put up a spirited defence in favour of Bagyenda who now, in the eyes of the public is soiled.

Even then, Bagyenda was due for retirement this July 2018; it is less likely that should the IGG press on and BoU opts for a judicial interpretation of the IGG’s powers, a verdict will be delivered before July.

Either way, Bagyenda may as well officially bid farewell to her former powerful seat at BoU and start preparing for retirement or even long days in the court room, should the IGG find her guilty.

What a way to end; after a career of 36 years!

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