Magoola Challenges Auction of Dei Properties in Shs 148bn Equity Bank Dispute

A fresh legal battle has erupted between businessman Dr Mathias Magoola and Equity Bank following a notice to auction several high-value properties over a disputed Shs 148 billion loan balance. Legal representatives from Muwema & Co. Advocates, acting for Dei Industries International, Dei BioPharma, and Magoola, have strongly contested the intended public auction or private treaty sale.

The contentious auction targets eight properties located across Kampala and Wakiso districts. Among the threatened assets is the major Dei pharmaceutical manufacturing facility situated in Matugga, alongside industrial plots in Luzira, and premises in Katwe, Muyenga-Kisugu, Kitende, and Seguku.

According to the legal team, the lenders—comprising Equity Bank Uganda and Equity Bank Kenya—are attempting to enforce recovery before the court conclusively establishes the actual outstanding balances. The dispute revolves around claimed sums of Shs 82 billion and $43 million, which the borrowers argue are heavily inflated due to irregular loan consolidations, restructuring, and excessive interest charges.

The legal friction stems from a long-standing disagreement that reached the courts in August 2024. Although a consent order was previously established to pave the way for an independent audit by a neutral firm, subsequent disagreements arose regarding the appointment of auditors and the transparency of the reconciliation process. Even though the Court of Appeal recently stayed proceedings in the main High Court suit pending an appeal, the impending property sale has alarmed the borrowers.

Furthermore, the high-profile dispute casts a spotlight on substantial government investments poured into the Dei BioPharma project, including hundreds of billions in supplementary budgets. Parliament and the Auditor General have previously scrutinized these public allocations due to missing documentation and unclear shareholder returns.

Lawyers have formally warned prospective buyers against participating in the auction, cautioning that purchasing the advertised properties entails significant legal risks while court matters remain unresolved.

For more details on this developing story, read the original report on The Observer.