Former Post Bank Officials Lose Bid to Block Suspension

The High Court in Kampala has dismissed with costs an application by five Post bank officials challenging their suspension without a fair hearing. 

They are Stephen Mukweli, the Managing Director, Safina Wabuna Nakiyemba, the Executive Director for Information and Communication Technology, David Mwesige, the head of Information Technology, Augustine Kisitu, the head of Business Technology and Fred Samuel Wasike, the Head of Business Growth.

They ran to court after the Bank of Uganda suspended them on April 23, 2019, to pave way for investigations into allegations of abuse of office and other irregularities by the Anti-Corruption Unit of State House, Office of the Auditor-General, and the Criminal Investigations Directorate.  

The officials appeared before the Anti-Corruption Court on May 2nd, 2019 for causing the bank a financial loss of more than Shillings 4 billion meant for different services and supplies involving Compulynx Uganda Limited, which was supposed to offer e-banking related services. On May 30th, 2019, the Bank of Uganda issued another directive staying the suspension of the officials on grounds that the outcome of the court process may impact the extent to which they can be considered fit and proper to manage the affairs of a financial institution.

Dissatisfied with the directives, the five officials petitioned the High Court Civil Division through their lawyers led by Robert Kirunda to quash the directives on grounds that the Central Bank made them in total disregard of the rules of natural justice.  They also argued that the decision to maintain their suspension was irrational, procedurally unfair, and irregular, adding that any actions and decisions resulting therefrom were tainted with illegality.  

They asked the court to issue an order compelling the Bank of Uganda to permit them to resume their employment at Post Bank in accordance with their employment contracts and compensate them for the inconveniences caused.      

In response, the Bank of Uganda through their lawyer Albert Byamugisha asked the court to dismiss the case on grounds that the applicants were top managers of Post Bank who were being investigated by state institutions for abuse of office and causing financial loss contrary to the Anti-Corruption Act.  The central bank also argued that the accused were not fit to stay on the job as the court process was ongoing.

In his ruling Justice Musa Ssekaana has dismissed the application, saying that there was no need for a fairing hearing for the accused persons since their matter was being handled by other state agencies. “There was no necessity for a hearing as described by counsel for the applicant to be called since the applicant’s cases were being handled by other state institutions mandated to investigate matters of corruption”, said Ssekaana. 

 

Adding that, “Those investigations by Anti-Corruption Unit of State House, Office of the Auditor-General and the Criminal Intelligence and Investigations Directorate for offenses contravening the Anti-Corruption Act were sufficient to warrant the respondent to direct the applicants’ suspension under section 82 of the Financial Institutions Act".

Section 82 gives the Central Bank powers to issue directions regarding measures to be taken to improve the management, financial soundness, or business methods of the financial institution if it has reason to believe that the affairs of the financial institution are conducted in a manner detrimental to the interests of the depositors or prejudicial to the interests of the financial institution or in contravention the Financial Institutions Act. 

Mukweli, who was the Managing Director of Post Bank has since been replaced with Edwin Keronga. The Government of Uganda has 100 percent shareholding in the bank.