By Jazeerah Mirembe
KAMPALA.The High Court has dismissed an application by businessman Matthias Magoola and his companies seeking to remove the accountants’ professional body from an audit process in their roughly Shs242 billion loan dispute with Equity Bank.
Commercial Court Judge Susan Abinyo ruled that DEI Industries International Ltd, DEI Biopharma Ltd and Magoola had failed to prove allegations that the integrity and independence of the Institute of Certified Public Accountants of Uganda (ICPAU) had been compromised.
The applicants wanted the court to revoke an earlier order under which ICPAU nominated an independent firm to audit loans extended by Equity Bank Uganda and Equity Bank Kenya.
“This application lacks merit,” Abinyo said in a July 29 ruling, dismissing it with costs in the cause.
The dispute stems from financing extended to Magoola’s businesses, including DEI Biopharma’s pharmaceutical manufacturing complex at Matugga in Wakiso district, a project the Ugandan government has supported as part of efforts to expand domestic production of medicines and vaccines.
Equity Bank previously said it committed up to $100 million (about Shs370 billion) towards construction of the pharmaceutical plant, acquisition of equipment and machinery and working capital. Uganda Development Bank provided another $20 million (about Shs74 billion).
The relationship between DEI and Equity Bank later deteriorated over the amount outstanding on the facilities.
In June 2024, Equity demanded Shs82.24 billion under facilities in Uganda and $43.23 million (about Shs160 billion) under facilities in Kenya, putting the combined demand at roughly Shs242 billion at an exchange rate of about Shs3,700 to the dollar.
DEI disputed the figures and sued Equity Bank Uganda and Equity Bank Kenya in August 2024, seeking an audit and reconciliation of its loan and current accounts to establish the actual debt.
The companies also sought the reversal of any amounts found to have been unlawfully debited and an injunction restraining the banks from taking enforcement or recovery measures until the case was determined.