19 April 2014

Uganda: UDBL - How the Bad Guys Derailed the IGG


The Inspector General of Government (IGG) has a unique set of powers. Under the 1995 Constitution (as amended), the IGG was given a remit to discipline, not just civil servants, but also elected officials especially in matters of corruption.

The inspectorate has powers to investigate any decision or advice taken by any public official or authority.

This can be on its own initiative or upon a complaint made to it by any member of public, whether or not that person has personally suffered any injustice by reason of that decision, recommendation or advice.

This particular remit has been further improved by the enactment of the Whistle-blowers Act.

Unfortunately, the very office which is supposed to promote and foster strict adherence to the rule of law and principles of natural justice in administration, has been sometimes taken for a ride by self-seekers and crafty wrongdoers.

As a result, it has fallen prey to the very mischief to the detriment of the organisations or individuals being investigated.

The recent case of Ojangole Patricia, and four others v The Attorney General, illustrates my point.

This is the case in which the chief executive officer of Uganda Development Bank Limited (UDBL), Patricia Ojangole, two other senior officials, Andrew Mulubya and Daniel Kaggwa, plus the board chairman, Dr Samuel Sejjaaka, ran to the High court (for judicial review).

They wanted court to determine whether the IGG had not misused her powers when she directed the board chairman to suspend the aforementioned top executives without giving them a fair hearing. They contended that the directive by the IGG was illegal, high-handed, irrational and unreasonable.

Judge Steven Musota has ruled in their favour and quashed the IGG's directives and also restrained the IGG from ordering or directing the board to suspend those employees on the premise of investigations. That is a province preserved for the board of directors' discretion.

The story of UDBL is an intriguing one. Once it turned out that the hunted was being cleverer than the hunter, it became an issue of who had bigger guns, rather than what was in the best interest of UDBL.

As it has been shown in judge Steven Musota's ruling, there was a time when it became difficult to tell whether the decision to arrest and suspend the top executives was not based on impulse. My understanding is that the IGG was derailed into the succession struggles at the UDBL, where the new board, led by Dr Sejjaaka, was trying to take control of a bank that was struggling with a myriad of issues, including mismanagement, corruption and plunder.

After Dr Sejjaaka took charge of the board, Miss Ojangole was one of the experts appointed to do an internal audit. It's during that time that Ojangole unearthed alarming details pointing to corruption in the loan credit assessment systems. There was a loss of Shs 10bn that was discovered and fault could be traced to the former top executives.

Much of the dirt in the bank was further confirmed by other independent audits done by PricewaterhouseCoopers, UDBL's external auditors, and the forensic audit done by the auditor general in December 2012. They both implicated some people who later ran to the IGG for protection. The auditor general's audit reported a potential loss of Shs 54bn and established another Shs 22bn loss.

When these reports were given to Dr Sejjaaka's team, they decided to sack all senior staff and the matter was handed to police's Criminal Investigations and Intelligence directorate to investigate the suspects for abuse of office and embezzlement. The board then embarked on restructuring and recruiting top-notch managers to revive the bank's image and return to business.

Naturally, after being sacked, some of them ran to IGG for protection with allegations of unfair dismissal. But then, there were those who had remained in the bank, pending investigations, and knew that their performance record could not help them retain their jobs.

They devised a defence weapon - whistleblowing. They alleged that the new management was involved in corruption and they were victimising them for revealing information to the IGG. Premised on the Whistle-blowers Act, which forbids victiminising the informers, the IGG weighed into the matter.

They took a decision to prosecute the new management team (Ojangole's) on grounds that they had sacked and therefore victimised an employee suspected to be a whistle-blower.

The IGG's office didn't seem to have given keen attention to the timing of the UDBL decision to sack the whistle-blower and that of the whistleblower's complaint. The bank was in transition and, based on the audit reports, the board had a mission to rehabilitate the image of the bank. No one in the IGG's office imagined that actually, the whistle-blower was not blowing the whistle because they were exposing corruption and the rot in the bank, but a means of self-preservation.

Judge Musota's ruling highlights a number of clues that the IGG needs to follow in order to avoid being used as a means of self-preservation by the hunted. Beyond blowing the whistle, the IGG needs to establish whether or not the whistle-blowers themselves have a measure of blame they are trying to cover up. In this particular case, the "whistle-blower" spouse, who once worked in the IGG's office crafted the scheme that led to the arbitrary arrests of bank officials. He too had been chased from the IGG's office for dodgy conduct.

Dr Sejjaaka's team was fighting tooth and nail to put a sheen on the bank, but they couldn't do so when the IGG ordered for the arrest and suspension of the new team. Until court intervened, the self-preserving whistle-blowers appeared to be winning, ironically with the protection of the IGG.

Twitter: @piuskm

The author is the finance director, The Observer Media Ltd

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