Emails have emerged showing how Foreign Affairs minister Sam Kutesa and his wife Edith allegedly attempted to get what is believed to have been Crane Bank sold to a Chinese energy enterprise days before the central bank seized the Ugandan institution.
Recent revelations in a US court show how Kutesa was given $500,000 (Shs 1.8 billion) as part of an international plot to advance the Chinese firm's business interests in Africa, specifically Uganda's energy and financial sectors.
Details of this transaction emerged following last weekend's (November 18) arrest of Chi Ping Patrick Ho, a former home secretary of Hong Kong and head of a non-governmental organisation funded by the Chinese conglomerate.
Ho is now in US custody along with Cheikh Gadio, a former foreign affairs minister of Senegal, on charges of international money laundering, violations of the Foreign Corrupt Practices Act and conspiracy to commit both crimes sometime between 2014 and last year. These crimes attract a 20-year jail sentence in the US.
It is alleged that Ho bribed Chadian president Idris Deby as well as Kutesa, and also gave gifts to and promised financial rewards to President Museveni.Kutesa was on Thursday quoted by Daily Monitor as rubbishing the bribery allegations.
"The foundation does exist, it receives support and donations from well-wishers. Calling this a bribe is utter nonsense," he reportedly said in a text message referring to the $500,000 'donation' to a charity linked to him.
Don Wanyama, the senior presidential press secretary, had earlier described the dragging of the president's name into this case as "madness", saying Museveni's ideological orientation puts him above such.
Emails covered in documents before US magistrate judge Kevin Nathaniel Fox in New York city show a trail of Edith Kutesa's correspondence with Ho. Her husband, who was president of the UN General Assembly (PGA) at the time, was copied-in.
The documents indicate that Ho promised Kutesa future benefits in exchange for help in acquiring a Ugandan commercial bank "which was bought in January 2017 by another commercial bank".
The only transaction in Uganda fitting that description is the sale of Sudhir Ruparelia's Crane Bank by Bank of Uganda to dfcu Bank.
Around March 17, 2015, the US Federal Bureau of Investigations (FBI) says that Kutesa's wife emailed Ho stating, "Dear Patrick... It was so nice to have such quality time to talk and discuss about different opportunities of investing in East Africa and Uganda in particular. Thank you so much, we enjoyed having you... We talked about the banking sector with possibility of acquiring a bank creating a direct link between our currencies, a project for which I would be happy to facilitate and we should discuss this further when we meet in HK ... I hope and wish that my message finds you well and thank you again for your time, the gifts and willingness to help me."
On February 29, 2016, the court documents say that she reminded the Chinese of the financial vacuum a global bank, which some reports have named as Barclays, had created after departing Africa.
"Considering the growing trade between China and Africa, this is a great opportunity in the banking sector in Africa," she wrote.
Two months later in May,2016, after a Chinese delegation attended the swearing-in of President Museveni in Kampala, Ho emailed Edith thanking her for hosting them and said: "We are very enthusiastic about the prospect of joint venture in Uganda."
Ho further stated that they were very interested in acquiring controlling shares of this global bank's branch in Uganda, and that they needed the Kutesa's help in going about this.
"This will be our first priority and please work with us to accomplish this," he wrote.
On May, 27, 2016, Edith replied, "we appreciate your interest in Uganda and excited to work together." The same day, Ho answered, saying that the energy company would like to partner with Kutesa's family and Museveni's local operators.
"The key is to get the bank in Uganda up and running to become the first offshore renminbi (Chinese currency) exchange centre in Africa," Ho wrote.
"Then we can establish relationship through this bank in Uganda with other banks in China and banks in Europe and this route [for] cash flow to Africa would enable us to invest in a host of ventures."
Enter Crane Bank
Other emails referring to a global bank followed until mid-October when, according to the FBI, Kutesa's wife contacted Ho to announce the opportunity of actually acquiring a "Ugandan bank".
According to Ho's indictment papers, on October 13, 2016, she sent Ho an email titled "Opportunity to invest in banking sector ".
Therein she stated that the "central bank official you met during your visit has contacted us to inform you about the possible acquisition of a local bank but as you know, selling a bank is a very confidential and urgent process."
In the email, she provided the website of the "Ugandan bank" which was to be bought and instructed Ho to express the energy company's interest by sending a letter to the Deputy Governor of Bank of Uganda, Louis Kasekende.
"It is imperative that that letter is sent by close of business today through email," she said. "In the mean time I would love to talk to you on phone."
The FBI asserts that Ho forwarded this email to another employee whom he instructed to write to Kasekende. The FBI says a letter was subsequently written to Kasekende, copying Ho and Kutesa's wife but it seems to have arrived late.
"According to press reports, on or about October, 20, 2016, the central bank took over the Ugandan bank... ," the US court documents state.
It was on October 20, 2016 that Bank of Uganda took over management of Crane Bank and suspended its board members.
The FBI investigation found that on or about October 24, 2016, Edith emailed Ho, copying Kasekende, stating, "I tried your number in vain, adding, "Please try to contact the vice governor as soon as you can."
She provided a telephone number on which Ho could reach Kasekende.
"It is quite urgent, thank you," she wrote.
Ho then emailed Kasekende, stating, "Please send me whatever you have through this mail."
On October 25, 2016, the FBI says that he received an email from an unnamed BoU official who inquired whether the energy company was still interested in acquiring a bank in Uganda.
Yesterday, Kampala Associated Advocates, the law firm representing Sudhir in the Crane Bank affair, declined to comment, pleading that they have made their case in court.
BoU's communications director, Christine Alupo, said in an email that all actions Bank of Uganda taken during pre-takeover of Crane Bank were in accordance with the law and regulations. She declined to go into detail since the case is in court.
Alupo observed that given its role in the macro-economy, and as regulator of the financial sector, BoU is frequently approached by those exploring business options in Uganda.
"As a matter of routine, bank officials refer them to standard and publicly available information related to the regulation and supervision framework," Alupo said.
"During these engagements, the bank advises the prospective investors to acquaint themselves with the regulatory regime and for them to independently assess the opportunities within the economy as well as their capacity to meet the legal requirements," she said.
On Tuesday, November 21, Ministry of Foreign Affairs permanent secretary Patrick Mugoya defended Kutesa, saying the minister's interaction with Ho was in line with his duties as PGA.