Kampala, Uganda | THE INDEPENDENT | The Central Bank Governor Emmanuel Tumusiime Mutebile has said that they will review the Bank’s policy on conflict of interest.
Parliament’s committee on Commissions, Statutory Authorities and State Enterprises (COSASE) is currently investigating circumstances under which the Central Bank closed and sold seven commercial banks between 1993 and 2016 as highlighted in the 2017 forensic audit report by the Auditor General.
However, the committee has discovered that the Central Bank hired external lawyers who are directors in different commercial banks as their legal advisors in processes leading to closure of some of the financial institutions.
A case in point is on the closure of National Bank of Commerce in 2012 when the Central Bank negotiations for the sale had been conducted by a team consisting of the former Executive Director Supervision Justine Bagyenda, Central Bank Legal Counsel Margaret Kaggwa, external lawyer from Max Advocates Timothy Kanyelezi Masembe and former Crane Bank Managing Director A. R. Kalani.
COSASE questioned the advisory role of lawyer Masembe from Max Advocates since he is the Board Chairman of NCB. Masembe is a partner in Max Advocates together with lawyer Apollo Nelson Makubuya who is Board Chairman of Equity Bank and lawyer Moses Adriko is on the board of Standard Chartered Bank.
Mbarara Municipality MP Michael Tusiime blamed BoU for abdicating its regulatory mandate and handed it to directors of commercial banks to determine the fate of other financial institutions that were in business competition with banks they represent.
Addressing MPs on Wednesday, Mutebile said that they had discussed the matter and taken note of issues raised concerning conflict of interest of service providers. He said that they are to review policy on conflict of policy and take steps to upgrade their performance.
COSASE Chairperson welcomed the step taken by Mutebile. He said that what is happening currently is against the principles of good governance. He also said that the committee will come up with a recommendation concerning the matter.