Updated by Faith Barbara Namagembe at 2038 EAT on Monday 18th July 2022.
Last week, court adjourned hearing of a case in which seven junior staff of Tropical bank are accused of fraud involving a Shs 1bn cash-out.
Prosecution alleges that seven staff who handled the transaction conspired to defraud the bank. They include Michael Kaggwa (sales officer), Brian Anguni (customs service officer), Aisha Nakyanzi Katongole (senior compliance officer), Imran Sadiq Hussein (bank relations officer), Sarah Bayiga Kakyama (branch operations supervisor), Abdu Nabonyene (operations branch manager) and Janer Zainab Ntalo (chief teller).
On December 8, 2021, the staff were arraigned in court and remanded before getting bail three weeks later. However, lawyers representing the accused have petitioned court and prosecution to not only absolve the accused, but bring to book senior managers who oversaw the fraudulent transaction.
Those accused of being protected include the executive director Joweria Mukalazi, head of risk Alex Okiira, Grifas Opio, the head of credit and Alexander Mayanja, the manager compliance and anti-money laundering. Defence records show each of the aforementioned had a role along the chain for the Shs 1bn to be released but have so far been spared from prosecution.
In 2021, a bank account in the names of Abdurrezagh Elmrabet had been declared dormant after more than six years of inactivity.
That’s when Margaret Nabona presented herself to bank in November, 2021 as the widow of Elmrabet. With Lukungu as her lawyer, she petitioned Mbarara High court for letters of administration.
According to court documents, she presented a death certificate of Elmrabet, a national ID and Local Council (LC) letters. All documents were confirmed by National Identification and Registration Authority (Nira) as legitimate So, Mbarara High court granted her wish as the estate administrator.
According to the defense, Nabona frequently walked into the bank main branch with Lukungu to meet Mukalazi in their pursuit to reactivate Elmrabet’s account.
“Only the top management could have known about this dormant account and any reactivation of an account takes the top management to approve,” said Tonny Tumukunde, the defendants’ lawyer.
In fact, records show that Tropical bank’s external lawyers of Mugerwa and Co. Advocates approved the documentation after doing their due diligence.
Email records show that the bank’s junior staff queried the disparity in Elmrabet’s name when Nabona went to claim, but emails show they were overruled by the seniors to process the money.
Therefore, Nabona was able to walk into the bank and withdraw the Shs 1bn in cash.
After the withdrawal was executed, Elmrabet, who is actually alive, petitioned Bank of Uganda (BoU) for redress, which in turn summoned Mukalazi for explanation.
It is around this time, the defense claims, that Mukalazi met Lukungu at Fairway hotel and the parties signed a memorandum of understanding that had Lukungu promising to return the money. The MOU was drafted by Mugabi and Co Advocates.
“This was a well-orchestrated fraud involving Mukalazi because her and Lukungu were classmates both at Makerere University and at LDC,” reads part of the defense petition.
“Unfortunately, this vital information has been concealed from the police and the office of the Directorate of Public Prosecution (DPP). The police only arrested those that cashed out the money yet email exchanges that show approval from top offices have been ignored.”
It is on this background that defence lawyers are pushing to have senior managers of the bank implicated in the fraud because they approved the bogus cash out of the money.
“We want to expose the dealings of Mukalazi and Lukungu and also show court that junior staff were acting on the orders of their seniors,” said one of the lawyers.
In December, the bank wrote to the State House Anti-Corruption Unit (SHACU) and DPP absolving Katongole, Ntalo and Bayiga of any wrongdoing but their charges are yet to be withdrawn.
This is not the first time Tropical bank top management has been sucked into fraud. In July 2020, senior bank managers, including Mukalazi’s predecessor Denis Muganga Kakeeto, Maurice Mugwiri, the head of operations and Hussein Sentamu, the head of credit, were fired for fraud.