“Bank of Uganda has 11 lawyers, highly qualified, and well resourced. There is no government ministry, agency or department of government with such level of lawyers. But they go out and out sourced for lawyers to do their work,” Katuntu said.
Parliament has accused the 11 man team of Bank of Uganda lawyers for not supporting the Central Bank with legal information and good management practices with regard to the sale of seven local commercial banks.
The banks include Teefe Trust Bank, International Credit Bank, Cooperative Bank, Greenland Bank, Global Trust Bank Uganda, National Bank of Commerce and Crane Bank Limited.
Abdu Katuntu chairperson of the parliamentary committee on commissions, statutory authorities and state enterprises (COSASE) informed Parliament that all the Bank of Uganda (BOU) lawyers have masters degrees, they get high good salaries and have plenty of resources to enable them to do their work.
"Bank of Uganda has 11 lawyers, highly qualified, and well resourced. There is no government ministry, agency or department of government with such level of lawyers. But they go out and out sourced for lawyers to do their work," Katuntu said.
Katuntu also observed that some of these lawyers have been on the boards of some of the closed banks which were quite unfavourable for sound legal practice.
Katuntu on Thursday presented the report of COSASE into circumstances under which the central bank closed the seven banks.
The report said an inventory report into the sale of most of the closed banks has not been provided to the Auditor General and hence to Parliament. The report said some of the banks were closed and sold on the same day leading to violation of sale procedures.
The Central Bank was found to be disclosing confidential information of distressed financial institutions to potential purchasers who are competitors without their knowledge in contravention of section 40 (3) of the Bank of Uganda Act.
The committee observed that the resolution of financial institutions is such a fundamental process and the informality with which these processes were handled is contrary to the law. "The banks were sold without records of negotiations being kept hence breaching all sound corporate governance principles," read the report.
The committee said it could not determine how Bank of Uganda negotiated and selected the buyers.
The committee's view was that in the absence of guidelines and minutes of the proceedings relating to the resolution of financial institutions in distress the BOU staff who handled the transactions greatly compromised the principles of transparency.
"The individual officers who handled the transactions should be held personally responsible," read the report.
Some members of the public who demanded a more severe report have said the report is toothless and those who have violated the law will get away with it.
But Katuntu said: "We have indicted BOU officials. We have proposed legal and policy reforms in the report." MPs begin debate on the COSASE report on Tuesday.