The Inspector General of Government has commenced investigations into several bank transactions of the Justice and Constitutional Affairs Minister, Maj. Gen. Kahinda Otafiire.
Mr Raphael Baku on March 21 wrote to Gen. Otafiire asking him to explain the sources of cash deposits on his bank accounts, and the purpose of loans acquired from some of his bankers – including Standard Chartered, Barclays, Cairo International and United Bank for Africa.
The minister is expected to explain sources and purpose of transactions amounting to Shs2.8 billion – carried out between 2008 and 2011 – including Shs340million in loans from UBA.
The IGG claims the minister did not declare some of the incomes accruing to him, in the declarations to the Inspectorate of Government, as dictated by the law. Under the Leadership Code Act, all public officials are expected to declare their incomes, assets and liabilities to the IGG annually.
“Reference is made to your declaration of income, assets and liabilities submitted to this office in 2005, 2007, 2009 and 2011. The Inspectorate of Government carried out a verification of your declarations in accordance with sections 4 (4), 5 and 26 of the Leadership Code Act, 2002 and section 31 of the Anti-corruption Act 2009, you are required to clarify on the banks deposits,” the IGG wrote.
“Records from United Bank for Africa indicate that you borrowed Shs50,321,000 and Shs290,385,000 on February 26, 2010 and May 25, 2010 respectively. Please state the purpose for which these loans were incurred, state the collateral security that was used to secure these loans, state the source of funds for the repayment of these loans and provide documentary proof,” Mr Baku added.
“Please, submit your response to this office within two weeks from the date of receipt of this letter,” the IGG states in his letter.
Asked about the directive, Maj. Gen. Otafiire yesterday laughed off the IGG’s concerns, especially details of “small” deposits like $9,000 (approx. Shs22m).
“Some people carry that as pocket change,” Mr Otafiire said in a fit of laughter. “If I didn’t know that borrowing a loan from the bank was illegal and necessitated one to get the permission of the IGG, then I am sorry, this will not happen again.”
But sounding more serious, the outspoken minister said: “If they discovered I borrowed money, why ask me for documentary proof when normally documents retained by the bank show re-payment schedule and some forms indicate the purpose for which the loan was intended and collateral security?”
He added: “How do you ask for explanation on money put on my accounts four years ago? Since the amounts involved are negligible for a businessman like me, I will work with the bank to establish who was paying for what. Sometime people deposit money on my accounts before they collect cows from my farm so who am I to know each and every deposit carried out four years ago?”
Mr Baku was not available for comment yesterday as he was understood to be travelling outside the country.
Besides the cash transactions, the IGG is also investigating Gen. Otafiire’s interests in several companies, including a local telecommunications firm – M/S Foris Telecom Uganda Ltd. The minister has been asked to furnish details of his capital contribution to the company and why he did not declare his interests.
Lukyamuzi Case
In 2005, then IGG Faith Mwondah ordered Rubaga South MP Ken Lukyamuzi out of the 7th Parliament for reportedly failing to declare his wealth. Justice Mwondah also slapped a five-year ban on Mr Lukyamuzi, barring him from holding a public office. When the MP tried to run for the seat in 2006, he was kicked out, prompting him to front his daughter, Susan Nampijja. Mr Lukyamuzi, however, contested the IGG’s ruling, losing in the Constitutional Court but finding justice in the Supreme Court that faulted Justice Mwondah’s decision and ordered that the MP be compensated for the time he was out of the House.