Dei says Equity Bank auction defies Court of Appeal stay

KAMPALA – Dei BioPharma Ltd, Dei Industries International Ltd and Dr Matthias Magoola say Equity Bank’s planned auction of their properties defies a Court of Appeal order that halted their loan dispute and barred the banks from relying on a contested audit report.

In a notice published in New Vision and other dailies on Monday, 9 November, their lawyers, Muwema & Co. Advocates and Solicitors, said the sale advertised on 5 November 2026 by auctioneers Jald (U) Ltd, acting on instructions from the Equity Bank Group, was issued with “active malice and utmost bad faith”.

The lawyers argue that on 9 September 2026 the Court of Appeal stayed all proceedings in the High Court suit between the companies and the banks. They say the court also restrained the banks from relying on the audit report at the centre of the dispute until the appeal is decided.

According to the lawyers, no legitimate outstanding loan balance or interest has been established that can lawfully be recovered against the properties. They describe the notice as an attempt to “illegally thwart and pre-empt” an independent loan audit that the banks have, in their words, consistently resisted.

The advertised properties include industrial and commercial land at Matugga (Kyadondo Block 82), where Dei BioPharma is building its pharmaceutical manufacturing plant, and plots at Kyamuli-Kungu, Luzira, Katwe, Muyenga-Kisugu, Kitende and Seguku.

The lawyers say that, because the court-ordered audit has not been concluded and adopted by the court, the sale cannot pass good title to any buyer. They warned that anyone who takes part in the auction does so “at their own grave risk”.

The dispute arises from credit facilities advanced between 2016 and 2021, mainly to finance the Matugga project, which has also attracted government investment.

In August 2024, the companies filed High Court Civil Suit No. 929 of 2024, challenging the banks’ demand for about UGX 82 billion and US$43 million. In the suit, they allege predatory lending practices, including inflated principal and interest balances, irregular consolidations during restructuring and what they call a “fraudulent false accounting scheme”. The banks have not yet answered these claims in court, as the matter is undetermined.

On 10 December 2024, the parties entered a consent order appointing KPMG to audit the loans. The companies later challenged the appointment, saying the banks had not disclosed an ongoing business relationship with the audit firm. Following that challenge, the Institute of Certified Public Accountants of Uganda (ICPAU) was directed to nominate an independent firm, and Clayton & Co. was appointed.

The companies objected again, alleging that the banks had secretly engaged ICPAU, and filed HCMA No. 1121 of 2025. They also claim that in December 2024 the banks induced them to pay UGX 120 billion (about US$30 million) on a promise of refinancing that was never honoured.

While that application was pending, Clayton & Co. issued a report in June 2025 placing the companies’ debt at about US$35.9 million as of 28 June 2025.

The High Court dismissed the challenge to the audit process on 29 July 2026. The companies appealed, and on 9 September 2026 the Court of Appeal stayed the High Court suit pending determination of the appeal.

In their notice, the lawyers said the planned sale is “neither justified nor lawful” and is part of what they describe as conduct “calculated to circumvent the judicial process”. They said they would seek legal sanctions against the banks and their agents.

The Court of Appeal is yet to rule on the substantive challenge to the audit, which has been at the centre of the dispute for more than a year.