Bank of Uganda external lawyers MMAKS were paid Shs9.8 billion to draft an agreement that paved way for the takeover of Crane Bank.
The shocking revelation was made by Timothy Masembe, a managing partner at MMAKS Advocates.
Early this week, Masembe told Parliament’s Committee on Commissions Statutory Authorities and State Enterprises (Cosase) that out of Shs200 billion cash consideration that was recovered from Crane Bank, lawyers from MMAKS took home Shs9.8 billion as legal fees for drafting an agreement for the Purchase of Assets and Assumption of Liabilities that BoU relied on to take over the defunct bank.
In October 2016, the Central Bank took over Crane Bank on grounds of undercapitalization, placed it under receivership before selling the commercial bank to Dfcu in January 2017.
As part of the deal, the lawyers were entitled to a 5 per cent of the money that would be recovered from the commercial bank.
“For context as to the extent of the discount given in the matter based on our long standing relationship with BoU, under the Advocates Regulations (Remuneration and taxation of costs) the applicable rate for preparation of a contract on conditions of sale is 5 per cent,” said Masembe.
On the other hand, the committee that is currently investigating the top BoU officials over their role in the alleged irregular closure and sale of seven commercial banks also is in possession of documents from the central bank which contain details showing private lawyers are demanding more than Shs25 billion for legal services though it’s not yet clear whether the Shs9.8 billion is part of the former.
MMAKS Advocates were also separately paid Shs792,104 per hour for 432 hours – about Shs342million – to act as transaction advisers for the disputed takeover of Crane Bank with the deals inked without any supporting minutes.
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