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Minister Kasaija now says Bagyenda reappointment to FIA board was in ‘error’

Kasaija reappointed Bagyenda to FIA board on May 7, three months after she was sacked y BoU and investigations against her commenced.

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SCRUTINY – The reappointment of Justine Bagyenda to the board of Financial Intelligence Authority (FIA) was in ‘error,’  Finance and Economic Development minister Matia Kasaija ha said.

The minister, who last week had to apologise for disowning mobile money tax, is apparently not done with disowning, this time an official, telling Parliament that Bagyenda is still under investigation.

The former Bank of Uganda director in-charge supervision was prematurely relieved of her duties in February in what is believed to be connected to the controversial takeover and eventual sale of Crane Bank.

Bagyenda has previously served on the FIA board but having been sacked from the central bank and being under investigation meant her seat on the board would be vacated. But in a surprise twist, she was instead reappointed to the board.

In a May 7 letter to Speaker Rebecca Kadaga, Kasaija re-appointed Bagyenda to the FIA board even as she was under investigation by the same body.

Kasaija also re-appointed Leo Kibirango as Board Chairman, Patrick Ocaillap as Deputy Secretary, AIGP Grace Akullo and Patricia Mutesi to FIA board.

“Under Section 26(1) of the Anti-Money Laundering Act, members of the Financial Intelligence Authority (FIA) board serve for a term of three years and are eligible to be re-appointed for only one term. Given the satisfactory performance of the Board during its first tenure, I recommend the re-appointment of the current members of the Board,” reads Kasaija’s letter.

However, Minister Kasaija now argued that the reappointment was made much earlier before Bagyenda’s name was associated with money laundering claims.

Kasaija told journalists last week that he was working on deadline to have the new board in place, but since she is under investigations, the appointment can be halted until she is cleared by the two investigating bodies, Inspectorate of Government (IGG) and FIA.

Concerns

Bagyenda’s reappointment had earlier led to concerns from a section of legislators, who said it was irregular to appoint an official to the same board that was investigating her on various allegations.

Bagyenda is also under a separate investigation by Financial Intelligence Authority and the Inspector General of Government (IGG) over illicit enrichment and money laundering, while a motion demanding that a Select Committee be set up to investigate the operations of Bank of Uganda and her role in the closure of Crane Bank is still on the Order Paper.

It sparked off on February 20 when a whistleblower petitioned the IGG to investigate Bagyenda, referring to different assets, and the billions of shillings she allegedly held in two bank accounts in Kampala.

Bagyenda made transactions worth Shs20 billion on multiple bank accounts in the last six years.
One of the fixed deposits on her account at Diamond Trust Bank (DTB) was $214,149 on December 29, 2017 at an interest rate of 3 percent.

The maturity date is set for Dec. 29, 2018, leading to a net interest of $5,536 after a tax deduction of $977.

Earlier on September 7, 2017, Bagyenda made a fixed deposit of Shs179 million and expects to earn a net interest of Shs7.5 million on maturity in March 2018.

She had on December 29, 2016, made another fixed deposit of $1776, 717 which matured in December 2017.

On December 28, 2014, the transactions which leaked from private auditors indicate, Bagyenda did not make any fixed deposit – but she had a balance of $238, 563 on her Diamond Trust Bank account.

For every deposit, Bagyenda received a certificate of deposit showing the interest the principal amount would attract, taxes incurred and net amount payable to her on maturity.

In March 2014, Bagyenda had made a fixed deposit of Shs900,029,548 which earned her a net interest of Shs9,187, 424.

In November 2014, Bagyenda had another fixed deposit of Shs568 million which saw her realize a net interest of Shs5.7 million.

In January 2015, Bagyenda made another deposit of Shs480,000,000, setting a maturity date of one month. She earned Shs4.8 million in interest.

Bagyenda’s source of these staggering amounts of money remains unclear.

Implication of appointment

The irregular reappointment of Bagyenda to the same board that investigates and tracks money laundering, the very crimes for which she is accused, would virtually mean an end to the case against her.

Earlier, Shadow Attorney General Wilfred Nuwagaba said the Appointments Committee should put on hold approving Ms Bagyenda until investigations by the IGG and the FIA are concluded.

“I hope sanity will prevail in the Appointments Committee to stay her vetting and approval pending clearance from the institutions investigating her,” Nuwagaba said.

Buhweju County MP Francis Mwijukye, a member of the Appointments Committee, warned: “That is wrong. If they had wanted to re-appoint her to the Board, at least they should have waited for the outcome of the ongoing investigations. In my opinion, the appointment should be stayed until investigations into her conduct at Bank of Uganda are concluded.”

However, in his response to the queries, Kasaija said that he made the appointment before IGG and FIA investigations began and that there is still ‘room for correction’.

“When I re-appointed her, the issues of money laundering and others were not yet in the press. There is no way I could have re-appointed her with question marks surrounding her integrity,” Kasaija said.

But when it was put to him that by May 7, it was public knowledge that Bagyenda was under probe, Kasaija asked for another day to crosscheck. “I do not want to commit myself on something I am not sure of, I need to crosscheck,” Kasaija said.

Bagyenda’s tenure at BoU came to an unceremonious after her name featured prominently in the controversial collapse of Crane Bank.

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