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    Distributor Drags Nile Breweries To Court For Being Repressive And Terminating His Contract In Bad Faith In Favour Of Another Person



    Nile Breweries operations manager Thomas Kamphuis

    A distributorship battle has developed among Nile Breweries distributors with the Company top bosses being accused of siding with recent entrants against their longstanding distributors.

    This battle has already culminated into a court case after one of the most affected companies, Salvation Distributors Ltd whose contract dates as far back as 2002 sued Nile Breweries over the said mistreatment.

    “Prior to receiving the said email, the Managing Director of the Plaintiff (Salvation Distributors) company was approached by two officials from the defendant (Nile Breweries) company who requested him to sell off his business and goodwill to another distributor M/S Keshwala Group of Companies. The plaintiff’s Managing Director out-rightly rejected their request clearly informing them that he had no intention of selling off his business,” reads in part the court documents

    Salvation filed at the High Court Commercial Division showing how Nile Breweries crafted the plot to throw him out of business for another distributor Keshwala. Salvation had an agreement with Nile Breweries to be the sole distributor of its products in the areas of Kyengera to Kayabwe and Maddu in Mpigi district.

    According to the various documents attachment to the case, Salvation’s profits have been high since 2002. Due to the huge profits, In 2017, Nile Breweries requested Salvation’s Managing Director Gregory Gidagui Mafabi to set up a state-of-the-art Warehouse at Kayabwe.

    Gidagui invested Shs2.5bn in the construction of the warehouse and purchase of new trucks, he ensured that the “return to issue (RTI) of the empties” was above 97% by purchasing more than 4000 empty bottles.

    Gidagui adds that he was also forced to dispose off a number of properties as well as obtain credit facilities from various banks to raise the necessary funds to comply with the defendant’s new terms and conditions.

    “Further to the above investment, Salvation Distributors procured a Distribution Management System (DMS) hardware as directed by Nile Breweries at a cost of Shs11.4m,” he stated. Nile breweries insisted that for better distribution of their product, Salvation Distributors had to change to this system which they sold to Gidagui and promised him that they were going to train his employees on how to use it. Salvation Distributors alleges that they fulfilled all the conditions.

    While launching its Shs2.5bn store in 2017, Nile Breweries operations manager Thomas Kamphuis was marveled at the great work and effort made by Gidagui. In a surprise turn of events, Gidagui waited for experts from Nile Breweries to train his staff on how to use the DMS to no avail and indeed, according to court documents, none of his staff has been trained to-date.

    As he was still waiting on the experts to come and train his staff, Gidagui started receiving inadequate supplies of Nile Breweries products yet he had stepped up his capital. He wrote to them and Kamphuis promised to work on the issue. To his utter shock and surprise, Nile Breweries instead sent him a letter dated May 28, 2018 informing him that they had received communication from him stating that because of inadequate supplies, they had decided to terminate his contract with them and they had decided to find an alternative distributor for his area.

    He wrote back on the same day informing them that he had not and has never developed any interest in terminating his distributorship contract with Nile Breweries. Nile Breweries new manager informed him that he was new on the job, he called for a meeting with Salvation Distributors on July 2, 2018 to discuss his issue. Surprisingly, while he was waiting to meet the Nile Breweries MD, he received a letter from the top management of the company asking him to sell his Goodwill to Keshala which he rejected.

    “On July 2, 2018, when MD Gidagui arrived at Nile Breweries offices for the meeting, he was given a notice of termination of distributorship agreement. According to the said notice, the reason for the termination was his failure to use the Distributor Management System,” read in part the court documents. When Gidagui tried to appeal, he was told that the notice of termination was final. Through his lawyers of Muwema, Advocates and Solicitors, Gidagui says Nile Breweries did not act in good faith to have this dispute settled since they were partly to blame for failing to train his staff.

    Muwema says that none of the other distributors were given the same conditions to fulfill as his client and worse of all, he is being punished for failing to surrender his business to someone else. Muwema says that none of the current distributors matches Gidagui’s record.

    “At the trial, Salvation Distributors shall also aver and contend that the alleged failure to use the DMS is not a ground for termination of distribution agreements; consequently, Salvation seeks damages for breach of contract against the defendant (Nile Breweries). Salvation shall further aver and contend that Nile Breweries’ acts of issuing a notice of termination which was unfounded was high-handed, repressive and done in bad faith for which he seeks exemplary damages,” he states.

    The High Court Commercial Division Registrar Festo Nsenga has already issued an Interim Order blocking Nile Breweries from completely terminating Salvation Distributors’ contract.  In his ruling delivered on Monday, Nsenga stated that this interim order should stay in place till September 25, 2018. “It is hereby ordered that: an interim order is hereby issued restraining the respondent (Nile Breweries), its agents and or servants from enforcing the Notice of Termination dated June 26, 2018 and July 16 threatening to terminate the Distributorship Agreement dated October 3, 2002 between the Applicant and the Respondent (Salvation Distributors), for marketing, selling and distributing of the respondent’s products in the areas of Kyengera, Kayabwe, Maddu and Mpigi District, pending the hearing of the main Application (HCM/640/2018) on September 25, 2018,” Nsenga ordered.

    He adds that this order is subject to extension where necessary. The order was issued in the absence of lawyers or representatives from Nile Breweries despite having been served with this application and responding to it. Salvation distributors was fully represented by its lawyers Fred Muwema and Charles Nsubuga.

    Our efforts to talk to Nile Breweries were futile as our calls went unanswered.


    By Jamil Lutakome     



    Equity Bank Shs6.5bn Fraud Case Deepens As More Suspects Are Charged, Remanded To Prison…



    Equity Bank fraud suspects Mukwaya, Mugumya and Kato appearing in court

    Three more suspects from Equity bank multimillion fraud case have been arraigned before the Magistrates Court of the Anti-corruption Division on charges of Conspiracy to defraud and remanded to Luzira prison.

    The accused persons are; Godfrey Mukwaya and Robert Mugumya, all former employees of Airtel Uganda and Fred Kato a former head of Small and Medium Enterprises at Equity Bank.

    Prosecution alleges that Mukwaya, a former sales manager at Airtel Uganda used different people to open up bank accounts through which the bank was defrauded of more than Shs10bn.

    State further alleges that Mugumya is linked to 179 fictitious companies that were created to defraud Equity bank and he used different persons to obtain more than Shs35 billion.

    The presiding Magistrate Abert Asiimwe did not allow the accused persons to plead to the charges reasoning that they are joined on the case file involving money laundering which is triable by the High Court.

    “While this court has powers to handle the case of conspiracy, this one is emanating from money laundering. I advise that you will plead to the charges in the High Court which has powers to entertain all the cases,” Asiimwe said.

    The three suspects charged brings the charged number to eight.

    On March 20, 2024, five people among them employees of Equity Bank were charged over accusations of money laundering in regard to disbursement of Shs62bn of unsecured loans to unqualified persons.

    The first suspects were arraigned before the Anti-corruption Magistrates Court on charges of obtaining credit by false pretense, money laundering and conspiracy to defraud.

    The remanded suspects are; the head of Agency Banking at Equity Bank Julius Musiime, Erina Nabisubi a relationship manager for telecom, Fred Semwogerere (Banker), Tumuhimbise Crescent Tibarwesereka (relationship officer) and Wycliff Asiimwe a distribution and marketing consultant with a microfinance facility.

    State alleges that between the 2021 and 2024 at Equity Bank in Kampala City, Nabisubi being a person employed as a relationship manager in charge of Telecom incurred a debt of Shs6.55bn from Equity bank falsely representing that the loans were being applied for by Najjemba Gladys who she fronted as having fulfilled the bank requirements to access the loans whereas not.

    State added that Nabisubi also incurred a debt of Shs300m from Equity Bank falsely representing that the loans were being applied for by Nagawa Latiffa who she fronted as having fulfilled the bank requirements to access the loans whereas not.

    It is alleged that between 2021 and 2024 at Equity Bank headquarters situated at Church House in Kampala, Nabisubi intentionally impeded the establishment of the true ownership of Shs6.5bn which she fraudulently obtained from Equity Bank as loan through account number 1032100370335 in the name of Najjemba Gladys purporting that the said funds were applied for by Najjemba Gladys as a loan whereas not knowing that the said funds were a proceed of crime.

    State further alleges that Musiime intentionally concealed the true ownership of Shs18 million which he received as gratification from Mutuuza Stella for having fraudulently processed a loan of Shs700m from Equity Bank by requiring her to deposit the said gratification on account number 1013101211316 in the name of Gilbert Rwaiheru Kiiza knowing that the said deposits were a proceed of crime.

    According to the charge sheet, in the year 2021 and 2024 at different places in Kampala and Wakiso districts; Musiime, Nabisubi, Ssemwogerere, Tumuhimbise , Asiimwe, Kato, Mugumya and Mukwaya conspired together to defraud Equity Bank of Shs62bn by fraudulently causing the disbursement of unsecured loans to unqualified people.


    By Grapevine Reporter


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    Businessman Kabanda, KACITA Leadership In Trouble As Traders Accuse Them Of Using Their Problems To Seal Juicy Deals With City Landlords And M7…



    KACITA's Thadeus Nagenda (L) and John Kabanda the Kampala New Generation Traders Association boss

    Thadeus Musoke Nagenda the chairperson of Kampala City Traders Association (KACITA) has declared that his association will not join the newly formed federation citing fraud and extortion.

    Musoke made the statements few weeks after controversial businessman John Kabanda of the Kampala New Generation Traders Association led a team of city traders to form a Federation named the Federation of Uganda Trade Association (FUTA ) and he was appointed the chairperson deputized by his friend Godfrey Katongole while Moses Lwegaba was appointed as publicity secretary.

    Former State minister for Trade Harriet Ntabazi was appointed as the patron of their federation which is set to open countrywide offices to assist traders to solve their problems.

    During the course of investigating this story, theGrapevine established that in Kampala city, there are more than seven traders associations and these are: Katukazane Shoe Dealers which brings together all traders dealing in shoes, Kampala Arcaders Advocacy Forum (KAFO), United Arcaders Traders Entrepreneurs Association (UATEA), Kampala New Generation Traders Association, Kampala Traders Association KATA), KACITA, Uganda Needy and Squatters Association, Kikuubo Business Community.

    According to Kabanda, all the said associations are supposed to be under his federation.

    However, Musoke’s KACITA, KAFO, UETEA declined to join the association because they did not participate in its formation.

    Musoke said that he cannot lead KACITA to join the new federation well knowing that its leader Kabanda is not a trader in Kampala city.

    He challenged him to prove by showing where his shop is located.

    He further explained that Kabanda is a known event and music promoter and he cannot be entrusted with traders’ issues to be handled with his team. Traders reveals to Grapevine that fellow members formed associations and federations to use it to seal deals with tycoons who are landlords owning city arcades and buildings where they operate from.

    “Their role is to incite us to demonstrate against the poor conditions we are operating from including paying high rent, paying money for using toilets, high taxes and when we placed the landlords on the wall by closing our shops, they invite our leaders in a closed door meetings, bribed them and came back when their tongues are changed speaking in different page with us, pleading with us to open our shops as negotiations proceeds and when you open nothing yielded,” a trader said.

    However Musoke explained that KACITA is currently the association that brings all traders in the country and they have over 20 associations which work under them while they are still in talks with others.

    Other traders accuse Kabanda of forming the federation to use it as a weapon in his ongoing drive to mobilize money for his coming introduction and wedding to his lovely wife.

    theGrapevine was told that traders were surprised when Kabanda decided to give his wedding budget to city landlords and one of them even offered to support him financially. Kabanda is of the view that once he gets married, his lifestyle will change and he will start handling issues respectively.

    Others claim that Kabanda has political ambitions to stand for a political office in Kampala city come 2026 and he wants to use his federation and the association to gather political support.

    theGrapevine also established that there is ongoing lobbying by city traders seeking to meet President Yoweri Kaguta Museveni to discuss the problems the traders face during their operations and both Kabanda and KACITA are fighting to lead the traders to meet the President with each association fighting to be recognised as the umbrella of all traders.

    When contacted, Kabanda denied all the accusations explaining that city traders are tired of KACITA because their leadership is in bed with landlords who are mistreating them. He gave the example of Isa Ssekitto the KACITA spokesperson who is also the spokesperson of Bagagga Kwagalana association which brings together all tycoons in Kampala city.

    On the issue of not having a shop in the city, Kabanda rubbished the allegation and revealed that he owns a shop in BBC building a long Nabugabo which deals in open shoes nicknamed ‘Nigina’.

    Kabanda’s statements were supported by sources in Uganda Revenue Authority(URA) who told theGrapevine that KACITA leadership act like dealers who agree with URA over a matter on behalf of the traders but after, they turn against them and disassociate themselves from the matter agreed upon and incite traders to turn against URA.

    Edward Ntale the chairperson of UATEA revealed how traders’ association leaders enrich themselves through their associations.

    He gave the example of the money collected from traders as transport to be used when going for meetings with government officials on issues concerning their problems.

    Sulaiman Matovu, a trader dealing in shirts said that the problem they are facing is that all their association leaders want to take themselves as leaders of other associations and no one wants to listen to another which is hindering the way to solve their problems.

    The internal fighting among traders comes days after Kabanda through his federation declared a sit down strike which was expected to start on Monday next week.

    Kabanda asked all traders to close their shops to send a message to Museveni’s government that they have also joined the struggle to liberate this country after being worn out by the high taxes placed on their exports.

    He pleaded with fellow traders to avoid people telling them that they should not participate in the strike because of the coming Idi day festival because they will lose business when they close their shops.

    Kabanda advised them to buy all the goods which they will use on Idi day, insisting that they are in the struggle and they need to sacrifice to achieve what they want.


    By Hadijjah Namagembe


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    Top Lawyers, Court Bailiffs Cite Witchcraft After Buyers Shun Tycoon Hamid’s Pearl Of Africa Hotel…



    Businessman Abdullatif Hamid

    For the second time now, city lawyers of MMAKS Advocates and ENS Africa Advocates instructed Armstrong Court Bailiffs and Auctioneers to do fresh advertisement inviting suitable buyers to participate in the auctioning of Aya hotel.

    “We shall proceed to sell the property below together with developments thereon by public auction pursuant to a warrant of Attachment and sale issued by the High Court of Uganda (Commercial Division) unless the judgment debtor pays to us the entire outstanding decretal sum (including interest) and our fees and costs before the fall of the hammer at the auction,” the advertisement in today’s daily read in part.

    The advert further explains that the property under attachment comprises a 5 Star Hotel situated at an altitude of 1240 meters above sea level making it one of the highest points with a 360 degrees view of Kampala city.

    The advert added that the hotel spans 32,000 square meters and comprises 23 floors, 296 rooms, 37 suites, 2 restaurants, 3 bars, 9 meeting rooms, 15th floor executive lounges and a business centre with all top class amenities. The said property is owned by Sudanese national Abdullatif Hamid, the Executive chairperson of Aya Investments Limited.

    The property under attachment is in LRV 3556 Folio 9 plots 7A1-9A1 & 10 Lugogo Road and plots M32, M183 & 2E Nakasero Hill Road Kampala measuring approximately 5.975 hectares.

    According to the advertisement, the second auctioning is expected to take place on 3rd May 2024 at the bailiff’s offices.

    When contacted, one of the lawyers at MMAKS Advocates reveals to theGrapevine that buyers have been inspecting the hotel but have not shown interest in buying it and it’s the reason they have instructed bailiffs to advertise the property for the second time.

    “That man must be a witch, I’m telling you, people have been coming but they are not committed to participating in the buying process,” a lawyer said.

    According to court documents, between 2007 and 2017, AYA secured Shs305bn from the Industrial Development Corporation (IDC), a South African lending company to construct Pearl of Africa Hotel in Kampala and was supposed to pay back the loan within ten years which he defaulted on.

    Hamid was dragged to the South African Tribunal and he did not defend himself which resulted in the judge Bruce Collins QC to issue a court order directing him to pay  Shs572bn which he challenged in Uganda Courts but he also lost the legal fight.


    By Hadijjah Namagembe


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