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Supreme Court to hear landmark $100M asset recovery case against four commercial banks

Lawyer Isaac Ssemakadde (inset) and the Supreme Court which is set to hear the landmark case this Thursday (Photo/DailyExpress)

Kampala, (UG):- The Supreme Court of Uganda has set Thursday, July 11, for the preliminary ruling and hearing in a high-stakes appeal filed by Legal Brains Trust, in which the Kampala-based democracy and human rights watchdog seeks to recover over $100M (about Ugx370m) from four commercial banks implicated in a corruption scandal dating back to 2010/2011.

The appeal filed before the country’s highest court challenges the constitutionality of “letters of comfort” issued by the Bank of Uganda governor, which facilitated short-term loans to Haba Group of Companies led by city tycoon Hassan Basajjabalaba, without parliamentary approval or adequate securities.

Between them, the four banks regulated by the Bank of Uganda — United Bank of Uganda (UBA), Tropical Bank, Orient Bank (now I&M Bank) and Bank of Baroda — altogether issued loans totalling about 46 million dollars (Shs 163 billion) to Haba Group during the financial year 2010/2011 without any of the usual securities.

The primary question for constitutional interpretation is whether “parliamentary approval” was one of the essential requirements that the banks should have asked for before participating in this high-risk venture, using depositors’ money to pad up a shady businessman, with legends feet of clay, and whose hands burn whatever they touch.

The Constitutional Court previously ruled that parliamentary approval was necessary, but failed to nullify the letters or direct the banks to refund the public funds.

Thursday’s Supreme Court ruling and decision will significantly affect Uganda’s asset recovery and anti-corruption efforts, which if it turns out successful, could result in refunds totalling over Shs 500 billion (USD 135 million) to the Uganda Consolidated Fund Account, plus interest, damages, and legal fees.

Led by Chief Justice Alphonse C. Owiny-Dollo, the seven justices will review the constitutionality of the Central Bank’s “letters of comfort” and determine whether to correct and adjust the remedies provided by the Constitutional Court in 2020.

The case has far-reaching implications for governance, transparency, and accountability in Uganda’s financial sector. A favorable ruling could set a precedent for private anti-corruption activists to surpass the asset recovery record of 14 government agencies which is Shs240 billion ($64.6M) as of December 2022, promoting direct citizen agency and reinforcing the rule of law.

According to a survey report published by the Inspectorate of Government in December 2022, the Ugandan government loses 10 trillion Shillings annually through corruption.

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