Parliament has referred three Bank of Uganda (BOU) officials to CID for questioning in regard to the botched local council bicycle deal.
Richard Byarugaba, Director Payment and settlement department, Margaret Kasule, the legal counsel and John Chemonges, the Director Banking are now in the hands of CID explaining why BOU failed to take responsibility for the 1.7 million US Dollars meant for the purchase of bicycles.
The three were on Friday appearing before the local government committee of parliament that is investigating the disappearance of 1.7 million dollars, which government paid to an Indian company Amman Industrial Tools & Equipment Limited (Aitel). The money was part payment for the purchase of 70,000 bicycles for local council officials.
This brings to four the number of people questioned by police in relation to the bicycle deal, after Patrick Bagarukayo, was take for questioning on Monday.
On Monday, John Kashaka Muhanguzi, the permanent secretary ministry of local government blamed the central bank for failing to verify the authenticity of documents presented before the money was paid out.
On Tuesday, Byarugaba admitted that they received 98 million shillings as payment for services rendered to the Ministry of Local Government. The officials maintained that under rules governing foreign Letters of Credit, BOU only looks at the contents and is not required to check the authenticity of the documents.
Dissatisfied with such answers, the committee referred the trio to CID officers stationed at Parliament. In a joint meeting with the accountant General, Gustavo Bwoch blamed Bank of Uganda for failing to follow instructions. He said the bank released US$1.7 million to Stanbic Bank without getting clearance from him.
Bwoch told the committee that he issued an audit certificate to Bank of Uganda on 5th April; weeks after the bank had credited the colossal amounts in an account held at Stanbic Bank. In doing this, Bank of Uganda ignored the advice from the accountant general.
The committee vice chairperson, Raphael Magezi asked the CID to accompany the officials for further questioning as they write more statements in regard to the bicycle deal.
Ronald Mugume, the Rukungiri Municipality MP suggested that the Bank refunds 98 million shillings it received from the bicycle deal. To him, they did not render any services that deserve payment of such colossal amounts.
Bwoch also blamed government for signing the contract with absurd terms. He observed that it was wrong for government to allow payment of up to 90% percent on the basis of receiving photographs of bicycles as opposed to having actual bicycles delivered. He advised the ministry to revise down the figures to 40%. The 1.7 million US dollars represent 40% but was not followed through because the bicycles have never been seen.
Since November 26, 2010, when the Local Government Ministry entered into agreement with Aitel, the ministry only confirms that 1,200 bicycles are at the port of Mombasa in Kenya.
