Bank of Uganda paid lawyers from MMAKS Advocates $ 217 (Shs824,600) per hour for 432 hours to act as transaction advisers for the disputed takeover of Crane Bank with the deals inked without any supporting minutes, a Parliamentary Committee heard on Tuesday.
MPs investigating the closure of banks heard that the Central Bank paid out $ 230,000 (Shs840,282,000) to lawyers from MMAKS Advocates to hold meetings to advise on how to finalise the disputed closure and sale of Crane Bank to dfcu bank.
MPs heard that Bank of Uganda's Director for Financial Markets Coordination (FMDC) Benedict Ssekabira placed telephone calls to lawyers from MMAKS Advocates and facilitated meetings where no minutes were taken but lots of dollars were paid.
Mr Masembe Timothy Kanyerezi, a Senior Partner from MMAKS Advocates, said the responsibility of taking minutes was with BoU and not the lawyers.
"Meetings vary. There are some [meetings] which are too small for minutes to be taken. If minutes were to be taken, they were to be taken by BoU. Lawyers do not take minutes, I do not know about other professions," Mr Masembe said.
MPs on the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) questioned why there were no minutes to support engagements between MMAKS and BoU or why the lawyers had not advised the Central Bank to do a valuation report on Crane Bank.
Committee Chairman Abdu Katuntu said MMAKS Advocates as the transaction advisor for the deal, reneged on its core function of advising the Central Bank after it emerged that no valuation report was conducted on the assets of Crane Bank.
"BoU did not value the assets and liabilities of Crane Bank. Instead, they relied on a due diligence report by the buyer [DFCU]. Don't you as the transaction advisor find it odd that BoU did not do a valuation report on the assets of Crane Bank and instead relied on the buyer?," Mr Katuntu asked.
Aruu County MP Odonga Otto noted that it was irregular for BoU to dip its hands into public coffers without any supporting documentation.
Regarding the question of whether or not the MMAKS Advocates defaulted in cases involving tycoon Sudhir Ruparelia, their former employee and BoU, Mr Moses Adriko, a partner from the law firm, indicated that their involvement in cases involving the BoU vs Crane Bank did not violate any law.
The Advocates were required to submit written responses to MPs on Thursday to definitely clear the air regarding the money paid to them by the Central Bank.
As the committee winds up proceedings on Wednesday with an exit meeting with Bank of Uganda, Mr Katuntu announced that a report for presentation in the House will be ready by Monday next week.