A fresh legal challenge has been filed against the proposed auction of properties belonging to Dr. Mathias Magoola and his associated companies, Dei Industries International Ltd and Dei BioPharma Ltd. The borrowers dispute the loan balances being pursued by Equity Bank Uganda and Equity Bank Kenya. Muwema & Co. Advocates and Solicitors, representing Magoola and his companies, argue that the outstanding loan balances of Shs 82 billion and $43 million have not been conclusively established by the courts.
The proposed sale involves eight properties in Kampala and Wakiso districts, including the Dei pharmaceutical manufacturing facility at Matugga and industrial properties along Sixth Link Road in Luzira. The lawyers accuse Equity Bank Uganda and Equity Bank Kenya of seeking to recover disputed loan balances, interest, and recovery costs before the completion of an independent audit and reconciliation process ordered by the High Court. The audit process has not yet produced a report that has been formally received, accepted, and adopted by the court.
The dispute dates back to June 2024, when the banks allegedly demanded Shs 82 billion from Dei Industries International and $43 million from Dei BioPharma. The companies and Magoola filed a High Court civil suit in August 2024, challenging the loan balances and seeking an account, audit, and reconciliation of their loan and current accounts. They accused the lenders of irregular loan consolidations and restructuring, excessive interest charges, and deductions, which they argued had inflated the outstanding balances.
The parties agreed to a consent order in December 2024, providing for an independent audit to establish the actual outstanding loan balances. KPMG was initially appointed to conduct the exercise, but its appointment was subsequently revoked following a challenge by the borrowers. The High Court then directed the Institute of Certified Public Accountants of Uganda (ICPAU) to nominate another independent audit firm, resulting in the appointment of Clayton & Co.
The audit report subsequently put the borrowers' alleged indebtedness at approximately $39.91 million as of June 28, 2025, equivalent to about Shs 147.7 billion. Dissatisfied with the ruling, the companies and Magoola pursued an appeal. On September 9, 2026, the Court of Appeal stayed proceedings in the main High Court case pending the hearing and determination of their intended appeal.
The renewed dispute raises questions about the protection of public funds invested in Dei BioPharma, particularly its pharmaceutical manufacturing facility at Matugga. The government has invested Shs 723.4 billion in the pharmaceutical project through allocations of Shs 70 billion in the 2023/2024 financial year, another Shs 75 billion in December 2023, and Shs 578.4 billion through a supplementary budget in 2024.
The lawyers argue that proceeding with the proposed property sale risks pre-empting the judicial process intended to establish the actual amounts owed to the banks. They maintain that their clients remain willing to settle any legitimately established outstanding loans through an independent and transparent reconciliation process. The lawyers intend to pursue legal remedies against the banks and their agents over the disputed recovery process and have warned members of the public against participating in the proposed auction.
Key points
- The dispute centers on the alleged outstanding loan balances of Shs 82 billion and $43 million.
- The government has invested Shs 723.4 billion in Dei BioPharma's pharmaceutical project.
- The Court of Appeal has stayed proceedings in the main High Court case pending the hearing and determination of the intended appeal.
