The accusation came after reports emerged that Bagyenda engaged external lawyers from MMAKS Advocates at Shs 930 million to offer financial advisory services on the closure of Crane bank without the involvement of the Bank of Uganda's legal department.
Crane bank was closed on October 30, 2016, an action which, according to the central bank governor Emmanuel Tumusiime Mutebile, was taken upon a determination that bank was a significantly under-capitalized institution and posed systemic risks to the stability of the financial systems in the country.
The commercial law firm co-owned by Apollo Nelson Makubuya, Timothy Kanyerezi Masembe and Moses Adriko received a payment of $251,045 (about Shs 930 million) for its financial advisory services. The payment was reportedly approved by the BoU governor Mutebile following a memo seeking the approval by Bagyenda.
The MPs on the Cosase committee were astonished to learn that the external lawyers drafted their own terms of engagement with the central bank. Cosase chairperson Abdul Katuntu said he found it "strange" that the lawyers crafted their own terms of reference.
But Bagyenda said that BoU legal counsel Margaret Kaggwa Kasule was in a better position to give answers on the engagement of external lawyers. Interestingly, Kasule denied any involvement in the matter, saying that her department was never involved in the process.
Bagyenda then requested that MMAKS be invited to produce the engagement letter that central bank has so far failed to trace. But Katuntu ruled that it was the ambit of the bank to produce the letter.
Katuntu accused Bagyenda of usurping the mandate of the legal directorate to engage external lawyers without the involvement of the legal department.