Eunice Nabadda Kayondo the Administrator of the Estate of the late Dan Kayondo has dragged ABSA bank to the High Court Civil Division Kampala over allegations of stealing money for the dead.

Nabadda through her lawyers led by Ronald Ruhinda claims that she is a daughter to Kayondo who was also given powers by court to administer his Estate including the bank account number 0288045860 which is in ABSA Bank Luwum Street Branch in Kampala city.

In her affidavit, she told court that after securing the powers of administering her father’s bank account, she went to the bank and the bank’s managers verified and approved her documents declaring her as the single signatory of the said bank account.

She narrated that the bank took all the necessary requirements including her telephone number which was going to be used for subsequent notifications and alerts.

She added that she found Shs40m on her father’s bank account.

She divulged that since the day she took over the account, she has never withdrawn any money, but she was surprised to learn that the account had only Shs3m as outstanding balance recently.

She insists that the bank breached the confidence she entrusted them with and slept on the job thus she wants court to compel them to pay her for the damage they caused.

“The plaintiff shall aver and contend that the acts and omissions of the defendants (bank) affected the Estate adversely and shall seek general damages of Ug Shs100, 000, 000,” the lawyers stated in their plaint.

Nabadda added that because of the bank’s actions, she suffered great loss and mental anguish for which she wants court to award her special damages.

She further wants court to order the bank to return Shs40m that was removed from her bank account without her knowledge.

However, the bank through their lawyers led by David Mpanga denied all the allegations insisting that they were not aware of the said fraud.

By Sengooba Alirabaki

Dr. Mathias Magoola together with his companies Dei Industries International Limited and Dei Biopharma limited formally Dei Natural Products International industries limited has institute a commercial suit in the High Court Commercial Division accuses Equity bank Uganda and Kenya of fraudulently scheming to target the money given to him by President Yoweri Kaguta Museveni’s government to settle his financial troubles and save his companies.

A few months back, parliament approved Shs578bn to be given to Magoola as bailout to his companies which were facing financial hardships with banks threatening to auction his properties which he used as security.

However, through his lawyers led by commercial law giant Fred Muwema, Magoola alleges that when the bank got information that government had bailed him out, it started inflating his loan balance of with the mission of taking all the money given to him by government.

He wants court to declare that the bank’s demand dated 27^th June, 2024 both in US dollars and shillings for the payment of the outstanding loan was illegal.

He explain to court that in 2016, he entered into a banker-customer relationship with equity bank and he applied for and obtained a credit facility of Shs400m to finance the completion of the construction of his factory at Kyadondo Block 82, plot 3228 Kiryamuli.

He continued obtaining several loans in subsequent years from the same financial institution.

He notes that all the credit facilities he obtained from equity bank contained a clause which encouraged him to seek independent legal advice in order to understand all the terms and conditions of the loan he was receiving.

He explains that despite the said clause, the bank officers were overbearing in their advice to him to take the loans as offered owing to the cordial relationship between the parties and thus he took their advice and signed the credit offer letters without consulting external legal lawyers.

He pins Samuel Kirubi, a manager at equity bank Uganda, Jimmy Mwangagi the Head of Credit, Munywa the Head of Risk, Abel Musiime the Head of Trade and Finance and Edward Ocen the legal officer of the bank for having guided and advised him when signing the loan transaction papers.

He adds that he was compelled to take the said loans, variation of terms, consolidations and restructures as offered because he was in urgent need of money to finance his capital-intensive projects.

Magoola accuses the bank officers of placing him in a tight spot with real threats of default foreclosure of his businesses which left him with no option but to accede to the bank’s demands.

He claims that counsel John Kabandize whose signature was seen on the signed documents as his lawyer was merely a witness to the agreement.

He explained to court that his companies faced hardship in servicing the loans due to unforeseen circumstances like Covid-19 outbreak and the Russian-Ukraine war which affected wheat imports for one of his companies dealing in import of wheat.

These hardships forced him to close it three years back.

He added that the delays in the completion of his medical plant also affected his plans of servicing his loans which resulted into high interest repayments to more than Shs150bn.

“That the defendants who are in a dominant bargaining position took advantage of the plaintiff’s desperation to engage in predatory lending practice done in violation of his non-delegable fiduciary and statutory duties,” he stated.

Magoola informed court that he reach out to the bank’s managers pleading with them to be reasonable in their demands.

He first requested for a waiver of exorbitant loan interests, then he asked to settle the outstanding loan that was at the tune of Shs155,188,727,733.

When all his prayers were rejected by the bank, which insisted on receiving full payment of the outstanding loan as demanded, he hired a certified public accounting firm to review the credit facilities and loan statements so as to determine the correct outstanding loan.

The firm issued an initial preliminary report which after full examination of the few loan statements availed, revealed that the banks had inflated the loan outstanding claim by a sum of Shs39,241,743,163.

He decided to inform the bank in writing.

Based on the explanation to court, Magoola and his companies prayed to court to issue an order for an account audit and reconciliation of the loan and the current accounts his companies held with the said banks to determine his actual debt, variation of terms, loan consolidations and also restructure it.

He also wants the court to issue a court order directing the banks to credit the plaintiff’s loan or current accounts with any amount of money found to be unlawfully debited upon the taking of an account, audit and reconciliation.

He wants court to also direct the bank to refund Shs47,652,951,120 which was unlawfully debited from his loan accounts and also declare that that the interest deducted during moratorium period for credit facilities on account No. 2220578883978 and 2220580311116 amounting to US$4,331,424 was illegal explaining that it denied him cash flow and caused loss and damages to his projects.

Magoola wants a declaration that the receipt, withholding and transfer of his US$9m loan repayment by equity bank Uganda to equity bank Kenya was an arbitrary act which exposes him to unnecessary penalty interest for which the defendants are liable to refund.

He insists that during the transfer of his money, they charged him Shs1,045,000,000 as interest which he says was an unlawful. He wants the funds to be returned.

He notes that the conversion of his US$2.430m credit facility to Shs11.5bn denied him liquidity and resulted in exchange loss to the tune of US$42,750 which the defendants are liable to refund.

The debiting of Shs80,000,000 as a loan processing fee for variation of terms and loan restructures in the credit facility of Shs16bn was extortionate and unconscionable.

He further wants the court to declare that the bank’s predatory lending practices resulted in a breach of the bank’s fiduciary and statutory duties owed to him.

The banks have not yet filed their defense so that the matter can kickoff.

By Sengooba Alirabaki

Controversial city tycoon Patrick Bitature now has time to take some breath after his lawyer Brian Moogi put up a legal fight against ABSA Bank Uganda and Uganda Electricity Transmission Company Limited’s threats to auction his multibillion properties over Electro-maxx deal.

In his submission, basing on the affidavit of Charles Muhumuza one of the directors of Electro-Maxx, Moogi managed to convince Christopher Gashirabake the Justice of the Constitutional Court which also doubles as the Court of Appeal to issue a court order staying the execution of the lower court’s decision against Electro-maxx.

Electro-maxx ran to the Court of Appeal after Justice Stephen Mubiru of the Commercial Division of the High Court dismissed his application seeking a leave to appeal against his decision and stay the execution of his orders.

In his affidavit, Muhumuza told court that there are a lot of threats from the respondents, thus they have to be put on hold until the determination of their entire appeal before the court of appeal.

He further revealed that the respondents had already started the process of executing Justice Mubiru’s orders.

However, the respondent through their lawyers led by Timothy Lugayizi protested the application insisting that it has no legal basis because there is no valid appeal before the Court of Appeal.

He added that Justice Gashirabake has no power to give orders as a single judge hence the matter has to be referred to a panel of three justices to determine the applicant’s case.

Justice Gashirabake overruled Lugayizi noting that he has powers to issue the order which Bitature’s company was seeking for.

He further stated, “The applicant has submitted in the affidavit in support that should the order for stay be denied, the applicant shall suffer more than the Respondent. I also find that there is a real risk of execution against the individual shareholders of the Applicant company.”

He directed the Court of appeal registrar to cause list the main application before the three justices of the court of appeal in the next convenient session.

According to court records, between 2021 and 2022, both parties entered a consent judgment to settle the matter out of court on two variation dates of 12^th October 2021 and 12^th January 2023 respectively.

However, Electro-maxx challenged the consent judgment in the High Court which was dismissed by Justice Mubiru.

By Sengooba Alirabaki