An Auditor General’s report to a parliamentary Public Accounts Committee on Commissions, State Authorities and State Enterprises (PAC – COSASE) investigating the closure of the defunct banks found that JN Kirkland, through a number of companies, many of which are suspected of being façades and fronts for Bank of Uganda officials, sold financial assets worth UGX135bn for a mere UGX8.9bn- a 93% discount! According to the Auditor General’s report, the assets included UGX34bn of loans that had valid, legal and equitable mortgage supported by proper legal documentation.
According to the AG, the UGX8.9bn sale price, represented 26% of the total secured loan portfolio and 7% of the total loan portfolio!
All this happened between 2005 and 2011 while Kirunda, was a Senior Legal Associate at JN Kirkland.
So when this reporter, asked Robert Kirunda on Twitter, to clarify on whether he had a role to play in this shadowy deal- Kirunda played dumb, now for 5 days, despite the fact that he has been active on twitter.
Kirunda who is known to have very strong views on government corruption also declined to respond to this reporters inquiries sent to his official email address, as well as his known Whatsapp and Twitter messaging inboxes. This reporter, asked Kirunda, who during the parliamentary probe, represented Justine Bagyenda, if, assuming he had any role to play in the deal, he had ever interacted with Bagyenda and Benedict Sekabira- the BoU Officials various named by a parliamentary probe on the matter for the mismanaging the particular assets sale.
He also declined to respond to this, regardless of a reminder.
Details: How JN Kirkland is believed to have conspired with BoU officials to profit from defunct banks’ asset sale.
According to investigations by this magazine and according to details available from the that in or around 2006, Bank of Uganda officials- mainly Justine Bagyenda and Benedict Sekabira hired JN Kirkland to advise them on how to dispose of assets of the defunct International Credit Bank (ICB), Greenland Bank and Cooperative Bank. It is not clear how BoU arrived at JN Kirkland, a firm founded in 2005, but accordingly, it is JN Kirkland, acting as an exit strategy external consultant for the central bank that identified a US company, Octavian Advisors, a US hedge fund, said to be specializing in distressed investments; itself founded in 2005, who agreed to buy the bad loan book.
Octavian Advisors would incorporate a company known as M/S Nile River Acquisition Company (NRAC)- in Mauritius on the 26th September 2007- just two months before they acquired the assets, on 24th November 2007 from Bank of Uganda.
The assets amounting to UGX135 billion at $5.25m- UGX8.9bn at the time (USD1= UGX1,710 in November 2007).
According to the Auditor General’s report, this transaction, occasioned the shareholders of the defunct banks, up to UGX126 billion in losses. Although Bagyenda tried to justify the sale price saying that many of the assets were bad, the Auditor General said that the UGX135bn, included UGX34 bn of loans that had valid, legal and equitable mortgage supported by proper legal documentation and concluded that the UGX8.9bn sale price, represented 26% of the total secured loan portfolio and 7% of the total loan portfolio.
But perhaps, the sale price is not the biggest problem- the problem lies in the details of how the transaction was layered- ultimately ending back at the doorsteps of JN Kirkland as a beneficiary from the very same transaction they were hired to advise on, for the owners of the law firm and companies linked to them would later be found in possession of land titles, previously used as collateral on some of the bad loans.
First of all, the details of how BoU reached at NRAC as a final buyer are shadowy and so was the valuation of the assets before sale. Bagyenda the sacked former Executive Director of Bank Supervision under whose regime most of the dirty selling happened, would later tell parliament that the price was reached at after what she called “desk estimation”!
In what appears to be a carefully constructed scheme, immediately after acquiring the assets at a give-away price, on 31st of December 2007, NRAC executed a power of attorney to M/S SIL Investments – a company only registered in Uganda just a month before, on 16th November 2007, to collect debts on its behalf!
More suspiciously, the registered physical address for SIL Investments was Greenland Towers, the then registered offices for JN Kirkland & Associates.
During an earlier investigation into the matter, by this reporter, one of the lawyers who represented SIL Investments on several of the loan recovery cases, intimated to this reporter that all legal instructions from SIL originated from JN Kirkland & Associates’ founding partner, a one Kakembo Katende.
At the time, Kakembo, the Robert Kirunda’s boss, did not pick up our calls and declined to respond to Whatsapp inquiries on the matter, despite having read them.
Interestingly, Octavian Advisors closed in 2012, over what it said was a difficult operating environment. Nonetheless SIL investments continued recovering the bad loans.
Octavian deal murky, SIL-NRAC deal fraudulent
The parliamentary probe into o the closure of defunct banks concluded that “the transaction between Bank of Uganda and Miss Octavian Advisors Plc. and her agents lacked transparency and officers involved should be held responsible for commissions and/or omissions which resulted in not marshalling the greatest amount of the assets of the distressed financial institutions.”
The committee further recommended that “the officers involved should be held responsible for conflict of interest,” and more importantly, the “fraudulent business activities being conducted by M/s SIL Investment on behalf of a non-existent Nile River Acquisition Company (NRAC) should immediately cease.”
“The Inspector General of Police is required immediately, on adoption of this report, to seize all the land titles in possession of Mr. Kakembo Katende of JN Kirkland and Associates and M/s SIL Investment arising from their management of the loan portfolio sold to Nile River Acquisition Company by Bank of Uganda,” ordered the committee.
“M/s SIL Investments and Mr Kakembo Katende should render an account to the public trustee of all monies received from the time Nile River Acquisition Company ceased” and that “the agency of M/s SIL Investments Limited cannot legally exist upon dissolution of the principal – that is Nile River Acquisition Company,” further concluded the committee.
Was Kirunda an innocent employee or is he playing Omerta-code silence?
Robert Kirunda has since left JN Kirkland and is a co-founding Partner at Kirunda & Wasige Advocates of the firm through whom he represents Bagyenda.
Robert Kirunda has since left JN Kirkland and is a co-founding Partner at Kirunda & Wasige Advocates of the firm through whom he represents Bagyenda. It is also likely that, he possibly did not know much about this deal and his representation of Bagyenda was merely coincidental, but he won’t say nothing, preferring to keep an Omerta-code silence.
Even when we asked him whether he found a moral dilemma and or conflict of interest in representing Bagyenda over a matter in which he, was likely party to by virtue of his former employment, he did not respond.
Neither did he respond to our question in regard to the fact that following the parliamentary probe and the Auditor General’s report that revealed that the assets of the three banks had been grossly undervalued to the detriment of the shareholders, if he had any regret, he did not respond as well.
Nearly a year has gone by since parliament promised to take action on parliament’s report and nothing has happened, in which case we are likely to never know the full truth and major questions will still linger.
For example, did JN Kirkland actually buy the bad assets for themselves through Sil Investments, but used Octavian Advisors and NRAC Company as mere smokescreens? If so, was JN Kirkland working on its own or was it representing some powers that be in Bank of Uganda. If yes, who are these people? Did the officials at BoU, then deliberately under-price the bad assets of the failed banks so as to privately benefit once the recovery had been done?
Robert Kirunda, as a former Senior Legal Associate at JN Kirkland surely has some of these answers to these questions. And he, just like his former boss, will possibly not respond ever to our inquiries, or will like most lawyers prefer to do, respond with threats to sue this publication and could actually go ahead and sue and life will move on for the former shareholders of the defunct banks.
The sun will rise and set and it will be another day of justice delayed.
Another blow as Judge throws out Kiggundu’s lawyer Muwema
When court sat on Friday to hear the Kiggundu’s application to stop independent audit, he did not have a written application, and Justice Henry Adonyo instead ordered the plaintiff’s lawyer Fred Muwema to go make a written application seeking court to dismiss the audit and return to court on September 30 for a hearing of the application. But this adds more pressure on Kiggundu who is choking with the loans.
On 31 August, the judge ordered the Institute of Certified Public Accountants of Uganda (ICPAU) to carry out and independent audit into the accounts of the businessman and financial statements exchanged between the two parties, and present a report to court.
When asked by journalists why he has filed for an application seeking dismissal of the audit, Fred Muwema had this to say. “We are saying that let the validity and legality of those credit facilities (loans) be decided first before you can audit” He said.
The ruling on the application of the main suit to determine whether the businessman owes loan arrears to the bank is set for 5th October 2020, after which a date for hearing of the case will be set.
Hamis Kiggundu through his companies Ham enterprises and Kiggs International (U) ltd sued DTB branches in Kenya and Uganda for deducting money from his accounts something which the bank contends and said they only acted as per the loan agreement of deducting 30% from Kiggundu’s accounts to recover the credit facilities rendered to him between February 2011 and September 2016
But Court documents filed by the bank in their defense shows that Kiggundu, between February 2011 and September 2016, was granted various credit facilities by the said DTB Banks.
First, via Ham Enterprises Limited, Kiggundu obtained a loan of $6,663,453 and another Sh2.5bn from the DTB (U) to finance his projects in the real estate business.
Later, according to New Vision, he got a facility worth $4.5m through Kiggs International (U) Limited from DTB (K) and mortgaged his properties, which include Plot 328 located at Kawuku on Block 248 Kyadondo, three plots that include 36, 37 and 38 on Folio 1533 Victoria Crescent II situated in Kyadondo and land on Makerere Hill Road on LRV 3716 Folio 10 Plot 923 Block 9.
Documents show that as of January 21, 2020, Kiggundu was in default on payment obligations of $6.298m on the loan facility of $6.663m, as well as sh2.885b on the demand overdraft facility of sh1.5b and the temporary demand overdraft facility of sh1b.
The banks say that Kiggundu was in default on the payment of another $3.662m out of a total loan facility of $4m and another $458,604 on a loan facility of $500,000, as of January 21, 2020.
The DTB consequently served him with a demand notice to either pay up or lose the assets that he submitted as collateral security. The bank threatened to attach a plot on Makerere Hill Road and other prime commercial properties.
Analysts says that Kiggundu’s lawyer is playing delaying tactics aimed at stopping the independent audit as ordered by the court earlier. Kiggundu had wanted court to believe his own audit of loan transactions, but that would amount to injustice to the banks that gave him money-DTB Uganda and DTB Kenya.
Minister Rukutana charged with attempted murder, remanded
The state minister for Labour, Gender and Economic Development Mwesigwa Rukutana has been remanded to Kyamugorani prison in Mbarara district.
Rukutana was captured in a video that went viral on social media showing him grabbing a gun from one of his bodyguards and started shooting at a vehicle belonging to supporters of his political rival Naome Kabasharira. At the time of the incident, Rukutana had just lost the Rushenyi country NRM flag to Kabasharira.
The prosecution alleges that on September 5, 2020, at Kagugu village in Ntungamo district, Rukutana and others still at large assaulted Julius Niwamanya and threatened to kill or injure him together with three others. The others are Stuart Kamukama, Dan Rwibirungi, and Moses Kamukama.
It is also alleged that Rukutana also willfully and unlawfully damaged a motor vehicle registration number UAR 840X Toyota Rav 4 type which belongs to Moses Muhumuza.
According to the Judiciary public relations officer, Jameson Karemani, Rukutana has not taken a plea of these charges against him since they can only be tried by the chief magistrate who was not in court today.
As a result, the magistrate decided to send him to Kyamugorani, awaiting his return to court on Tuesday.
Lira district headquarters closed over COVID-19
On Monday morning, district staff were blocked at the gate with only the deputy chief administrative officer, his secretary and the receptionist allowed access to their offices.
Paul Samuel Mbiiwa, the deputy chief administrative officer says that only heads of department will be allowed at the headquarters while the rest will work from home. He adds that the restriction will help to curb the spread of the virus.
“You see corona is not a joke. We have taken a step at fighting it and that is why you are seeing the staff outside. Even in my office here I do not want people to come if there is anything we can discuss on the phone.”
Francis Okello Olwa, a senior community development officer who doubles as the district spokesperson says that the entire district offices will be fumigated and closed for two days.
Health authorities in the district are planning to take samples from all the staff because they could have interacted with the one who tested positive. Currently, there are 19 COVID-19 patients under treatment at Lira regional referral hospital.
On Sunday four health workers at the hospital tested positive for COVID-19. Dr Patrick Odongo, a senior medical officer at the hospital also succumbed to the virus.
Sex Party Criminals Paraded Before The High Court On Multiple Charges
Uganda Cranes Safely Return Home From After spending Six Days In Dubai
MultiChoice unveils first Ugandan FM radio station on DStv audio bouquet
Radio Sapentia’s Sister Irene Succumbs to Covid-19
Justine Bagyenda’s Lawyer, Robert Kirunda refuses to comment on own possible role in dubious underselling of defunct banks
BREAKING! Former Kampala Lord Mayor Alhaj Nasser Ntege Sebaggala Is Dead
News1 month ago
Radio Sapentia’s Sister Irene Succumbs to Covid-19
Entertainment3 weeks ago
BREAKING! Former Kampala Lord Mayor Alhaj Nasser Ntege Sebaggala Is Dead
Entertainment1 month ago
Winnie Nwagi trolled for rebounding a 4-year-old leopard print outfit
News3 months ago
How Attorney General William Byaruhanga and other mafia lawyer cheated a family of their property
News3 months ago
Lockdown eased in Kenya: ‘Our family was separated for three months’
News2 months ago
AG Byaruhanga put Kassami family on “gunpoint” to sign press statement
Lifestyle3 months ago
1300 entries whittled down to 50 in Sanyu FM “Hot Mic” presenter search
News3 months ago
Karim Hirji Daughters: Our Sister Linda was Left out of Mom’s Will