Magoola's Attempt to Halt Bank Loan Audit Fails in High Court

Dr. Mathias Magoola, the driving force behind pharmaceutical start-up Dei Biopharma and DEI Industries International, has been unsuccessful in his latest bid to prevent an independent examination of his company’s loan arrangements with Equity Bank. The High Court has dismissed an application that sought to block an audit into loan facilities held with both Equity Bank Uganda and Equity Bank Kenya.

Dei Biopharma, which has received substantial government funding to boost local medicine manufacturing, is currently under scrutiny regarding its financial dealings. Magoola had initially petitioned the court in 2024, requesting a detailed account and reconciliation of his loan and current accounts with Equity Bank. His plea included determining the precise outstanding debt, scrutinizing loan modifications, and seeking a refund for any improperly debited funds.

An initial court order appointed KPMG to conduct this audit. However, following the submission of KPMG’s report, Magoola sought a review of the appointment. The court then directed the Institute of Certified Public Accountants of Uganda (ICPAU) to nominate an independent firm, leading to the appointment of Clayton & Company.

Before Clayton & Company could complete its work, Magoola lodged another application, arguing that ICPAU had been influenced by Equity Bank and lacked the necessary impartiality. He also claimed ICPAU failed to consult both parties before selecting the auditing firm.

In her ruling, Justice Susan Abinyo dismissed Magoola’s application, labeling it an abuse of the court process. The judge clarified that the court’s directive was for ICPAU to nominate an independent firm, not to consult parties beforehand, as this would undermine the intended independence. Furthermore, the court found that Magoola had not provided sufficient evidence to substantiate his claims of compromise or collusion between ICPAU and Equity Bank, deeming his allegations unsupported assertions.

https://observer.ug/news/magoola-loses-bid-to-block-independent-audit-into-dei-biopharma-bank-loans