Museveni’s BoU probe details leak

IGG accused, Mutebile, Kasekende under fire

Kampala, Uganda | HAGGAI MATSIKO | Details of a draft report prepared by the Inspector General of Government (IGG) into the controversial February 2018 staff changes at Bank of Uganda (BoU) have leaked and sparks are already flying.

The leakage occurred partly because some of the recommendations in the report are being heavily contested by some of the members of the committee. They accuse the IGG, Irene Mulyagonja of including her own views as the findings of the committee. As a result, sources told The Independent that some of the recommendations in the report are a major departure from what the committee agreed.

“The recommendations have already been rejected,” a source close to committee, told The Independent, “there is a feeling that the people (IGG’s) who were complaining are recommending what they wanted in the very first place.”

President Yoweri Museveni set up the committee in March last year to investigate a February 2018 staff reshuffle by BoU Governor Tumusiime Mutebile.

Bugweri County MP Abdul Katuntu, who also doubles as the chairman of parliament’s committee Commissions, Statutory Authorities and State Enteprises (COSASE), chairs the committee and is deputized by Bukedea Woman MP Anita Among as his deputy. Other members of this committee include Mbarara Municipality MP Michael Tusiime, Kasilo County MP Elijah Okupa, Mulyagonja and two officials from her office—David Makumbi and Justus Kaleebi.

Part of the committee’s work involved interviewing BoU staff. Insiders say over 60 officials were interviewed by the two officials from the IGG’s office within the walls of parliament. And because they were in charge of the committee’s secretariat, the IGG staff compiled the draft report.

The IGG team shared a final draft of this report for other members to approve and sign it before it could be submitted to the President.
The report is a tightly guarded, protected secret document that cannot be edited, shared or even printed, a source told The Independent.
By the time we went to press, members had just met at one of the top hotels in a Kampala suburb and were scheduled to meet again this week to reach more agreeable recommendations.

An insider told The Independent that some of the controversial recommendations contained in the report include firing Governor Tumusiime Mutebile and his Deputy Louis Kasekende because they have failed to ensure teamwork at the bank.

But, sources told The Independent, the majority view of the members of the committee was that Mutebile and Kasekende are allowed to complete their terms.

The draft report also recommends that the staff changes Mutebile made on February 07, 2018 should be reversed. Apparently, the majority of BoU staff interviewed by the committee said Mutebile’s reshuffle had taken them by surprise and was illegal.

But an insider told The Independent that during the interviewing process of BoU staff; only about 7 out of the over 60 staff interviewed said the reshuffle was illegal.

Initially, however, the sources said, the members had agreed that a few of the appointments Mutebile made in the reshuffle be reversed. Notable among these is the appointment of the Executive Director Banking Supervision, Tumubwiine Twinemanzi and a few other staff—especially those who came from outside the bank.

The reshuffle, which affected over 50 top officials of the Bank, including nine executive directors, 13 directors and 24 assistant directors, followed a host of internal scandals at the bank.

The most controversial was the takeover and sale of Crane Bank to DFCU Bank. Others were bungled recruitments, collapse of critical banking sector systems, suspicions of officials colluding with private banks that were allegedly costing the bank billions and undermining its roles, bungled procurements, corruption cases, and mismanagement.

The probe was started before COSASE started its public hearings into the rot at BoU.
Between then and now, BoU staff members have been exposed for grave mismanagement of the financial sector as part of the on-going COSASE investigation into BoU’s closure of eight defunct banks.

While making closing remarks after several weeks of appearing before COSASE with other BoU officials, Mutebile said that “the staff changes which were made in February 2018 were intended to address some of the challenges that we knew but which have now become all too evident in the last few weeks”.

Mutebile’s defence

Mutebile was the last to appear before the committee and defended his reshuffle.

During the interface with the investigating committee, Mutebile’s voice reportedly cracked as he struggled to hold back tears while making the point that he made the changes in the best interest of the bank. A source knowledgeable about what transpired during the meeting said at that point everyone went silent.

To make his case, he went through the chronology of events that led to the reshuffle crisis. In our previous reports, The Independent had already pieced this together basing on correspondences between senior officials at the bank.

In November 2017 Mutebile had declined to ratify the appointment of assistant directors and instead directed that the Internal Audit investigate the entire process.

Then Chief Internal Auditor, Deborah Kabahweza concluded that the process had issues and called for its termination.

But the Executive Director Administration, Solomon Oketcho insisted that Mutebile ignores Kabahweza’s recommendations and approves the appointments. Mutebile refused.

“We have to respect internal audit and cancel,” Mutebile insisted.
When board members were engaged, some suggested that since their term was about to expire, the appointments should be passed for now. But Mutebile stuck to his guns. Shortly after this Mutebile’s health deteriorated and he travelled abroad on sick leave.