The Speaker of Parliament, Rt. Hon Rebecca Alitwala Kadaga has ordered that the forensic audit into bank of Uganda by the Auditor General of Bank of Uganda’s takeover of Crane Bank in October 2016 and subsequent sale in January 2017 should go ahead as it does not contravene the sub judice rule being pleaded by Bank of Uganda.
The forensic audit into the sale of Crane Bank and other banks taken over and or sold by Bank of Uganda was ordered by the Parliamentary Committee on Commissions, Statutory Authorities & State Enterprises (COSASE) in April 2018 following an outcry from the public and the bank’s shareholders over a number of glaring irregularities.
However, The Auditor General on 23rd April 2018 wrote to the Speaker seeking clarification on whether he should go ahead with the Audit ordered by Parliament. This was after an April 19, 2018 letter by BoU Deputy Governor Dr. Louis Kasekende to the Attorney General protesting against the audit on grounds that such an inquiry offends the sub-judice rule.
On May 2nd 2018, Mr Christopher Gashirabake the Deputy Solicitor General wrote back to the BoU Governor on May 2 ordering the bank not to cooperate with either the Auditor General or Parliament regarding an investigation into the sale of Crane Bank on subjudice grounds.
The sub judice rule largely is applied to mean that a matter is already in the courts of law (under judicial consideration) and therefore is prohibited from public discussion elsewhere.
Bank of Uganda is not above the law
However Kadaga in a 10th May 2018 letter Ref: AP 116/161/01 to Mr. John F.S Muwanga, the Auditor General, titled: “Clarification on the special audit on the defunct banks” dismissed the opinions of the Solicitor General and said the audit should go on.
“In regard to the correspondence between the Bank of Uganda and the office of the Solicitor General and specifically in relation to the actions of Parliament, I am of the strong opinion that where any institution needs a clarification on a decision of Parliament, the right office to seek that clarification from, must be the office of the Speaker of Parliament,” wrote Kadaga, adding: “Therefore in response to your request for guidance, you should proceed with the audit as directed and submit your report to my office as is required by law.”
In the letter copied to the Rt. Hon Deputy Speaker of Parliament, Governor Bank of Uganda, Attorney General, Solicitor General and the COSASE Chairman, Kadaga also clarified that the COSASE request for a special audit does not contradict an earlier ruling by Deputy Speaker Jacob Oulanyah in August 2017 barring a motion to investigate Bank of Uganda over its role in the supervision of financial institutions over the sub judice rule.
“This request by the committee is, in my opinion, clearly distinguishable from the Rt. Hon Deputy Speaker’s directive about the motion which was intended to be discussed…. The audit that you were directed to conduct has nothing to do with Bank of Uganda roles in the supervision of Financial Institutions. Audits are processes directed by the Constitution. I don’t believe that there is any public institution created by the law in Uganda that is not subject to audit,” Kadaga, who herself is a lawyer wrote.
Kadaga also said that the “request from the Committee on Commissions, Statutory Authorities & State Enterprises (COSASE) was premised on the finding by that committee that there has never been any report by the Bank of Uganda on the defunct banks, namely: Teefe Bank, Greenland Bank, International Credit Bank, Cooperative Bank, National Bank of Commerce, Global Trust and Crane Bank.”
Sub judice rule does not apply to special audits
Kadaga’s position on the sub judice rule supports the position of Shadow Attorney General, Hon Wilfred Niwagaba [Ndorwa East], who yesterday was quoted in Daily Monitor newspaper saying that the parliamentary “Rules of Procedure give the discretion of interpreting whether an inquiry amounts to subjudice only to the Speaker and not a potential witness before a parliamentary inquiry.”
Mr Niwagaba said BoU cannot stop such an inquiry if the Speaker rules that it does not offend the law on sub judice adding that the sub judice rule only limits itself to a matter before courts of law being discussed in public and argued that a special audit and a subsequent report can’t be equated to a public discussion.
“It is the Speaker to decide that this matter is sub judice or not. The essence of the subjudice rule is not to prejudice a matter that is pending in court. Parliament is talking about an investigation to do with a forensic audit,” Mr Niwagaba told Daily Monitor.
Rule 64 (1) of the Rules of Procedure of the Parliament of Uganda reads: (1) Subject to sub-Rule (5) of this rule, a Member shall not refer to any particular matter which is sub-judice. However sub-Rule (5) which reads: “The Speaker shall make a ruling as to whether a matter is sub-judice or not before debate or investigations can continue.”
Niwagaba’s position is also supported by COSASE chairman, Hon Katuntu, who argued that: “Entities being audited do not have the liberty to choose what should be audited. The arguments being raised by the bank of sub judice do not apply to auditing. Your report may not be discussed in Parliament if in the opinion of the Speaker, it is subjudice,” Mr Katuntu wrote to the Auditor General and BoU.
Expose the ‘mafias’ at BoU
Budadiri West MP Nandala Mafabi, the lead petitioner for the audit into BoU, is also quoted by Daily Monitor as saying that BoU and particularly Mr Kasekende was attempting to shield a “mafia” at the Central Bank and insisted the Auditor General must be given freedom to audit the bank.
“Those are the mafias hiding what they have been stealing… I am certain that there is more plunder at BoU,” Mr Mafabi said.
Mafabi wants the forensic audit to especially focus on certain individuals at the central bank, including Ms Justine Bagyenda, the former director of commercial banks supervision.
Mafabi’s calls for focus on the role played by particular individuals at BoU reiterates an earlier August 1, 2017 interview with Daily Monitor by BoU Governor, Prof Mutebile in which he said that individual BoU staff should be held responsible for mishandling the issues of Crane Bank.
“It was Bank of Uganda staff but not the entire BoU. BoU has an executive director in charge of supervision,” he told Daily Monitor’s Ivan Okuda adding that, while he was responsible for what went wrong as the Governor, he was not “not criminally culpable.”
Asked who was criminally culpable, he said: “Ask the executive director for Supervision [Ms Justine Bagyenda].”
Bagyenda is already subject to a joint inquiry by the IGG and the Financial Intelligence Authority over alleged unexplainable wealth and possible money laundering and has since been relieved of her role at BoU by Mutebile.
Kasekende too has also been named in a Federal Bureau of Investigation (FBI) probe as having been involved in a plot, together with an unnamed BoU official and Mrs. Edith Kutesa (wife of powerful Foreign Affairs Minister, Hon Sam Kutesa) to secretly sell off Crane Bank, weeks before it was taken over by BoU, to CEFC China Energy Company a Chinese conglomerate.
Kadaga’s latest letter is has cast a spanner in the works over the sub judice rule issue that has in the recent past been subject of disagreement between parliament and the executive. It now remains to be seen what will follow next, especially that the Solicitor General has instructed BoU not to cooperate in the investigation.