Ugandan pharmaceutical company Dei BioPharma has accused Equity Bank of disregarding a Court of Appeal order by proceeding with plans to auction properties belonging to the company and its affiliated entities over a disputed loan.
In a legal notice published in Ugandan newspapers on Monday, lawyers representing Dei BioPharma Ltd, Dei Industries International Ltd and the company’s founder, Dr Matthias Magoola, argued that the planned auction contravenes a September 9 order issued by the Court of Appeal.
The lawyers, Muwema & Co. Advocates and Solicitors, maintained that the order remains in force and that no outstanding debt has been lawfully established to justify the proposed sale of the properties.
The notice follows a November 5 auction advertisement published by Jald (U) Ltd, acting on instructions from Kenya-based Equity Bank Group. The auctioneers indicated that the properties would be sold to recover outstanding loan balances, interest and associated charges.
According to the lawyers, the Court of Appeal stayed proceedings in the companies’ High Court case against the banks pending determination of an appeal challenging the loan audit process. The order also restrained the banks from relying on the contested audit report while the appeal is pending.
The legal representatives accused the bank of acting in bad faith, describing the planned auction as an attempt to undermine the independent audit process and pre-empt the outcome of ongoing court proceedings.
They further warned prospective buyers that the auction could not confer valid ownership rights over the properties, cautioning interested parties against participating in the sale.
The properties listed in the auction advertisement include industrial and commercial land in Matugga, near Kampala, where Dei BioPharma is developing a pharmaceutical manufacturing facility.
Other properties are located in Kyamuli-Kungu, Luzira, Katwe, Muyenga-Kisugu, Kitende and Seguku.
The loans in dispute were advanced between 2016 and 2021 and were largely intended to finance the Matugga pharmaceutical project, which has also attracted investment from the Ugandan government.
The dispute dates back to August 2024, when Dei BioPharma and its affiliated companies filed a case in the High Court challenging the lenders’ demand for approximately Shs82 billion and $43 million.
The companies accused the banks of engaging in unfair lending practices, including inflating principal and interest balances, irregularly consolidating loans during restructuring and operating what they described as a fraudulent accounting scheme.
The allegations remain contested, and the court has not made a final determination on the substance of the claims.
Dispute over loan audit
In December 2024, the parties agreed to appoint accounting firm KPMG to conduct an audit of the loans.
However, the companies subsequently challenged the arrangement, arguing that the banks had failed to disclose an existing business relationship with the accounting firm.
The Institute of Certified Public Accountants of Uganda (ICPAU) was subsequently asked to nominate an independent auditor, leading to the appointment of Clayton & Co.
The companies later raised fresh objections, alleging that the banks had secretly engaged ICPAU in the audit process.
They also claimed that the lenders persuaded them in December 2024 to pay Shs120 billion, equivalent to approximately $30 million, on the understanding that the payment would facilitate refinancing. According to the companies, the promised refinancing was never delivered.
In June 2025, while objections to the audit process were still pending, Clayton & Co. issued a report estimating the companies’ outstanding debt at approximately $35.9 million.
The Court of Appeal has since barred the banks from relying on that report pending determination of the appeal.
In July 2025, the High Court dismissed the companies’ challenge to the audit process, prompting them to appeal the decision.
In their latest notice, the companies’ lawyers described the proposed auction as unjustified and unlawful, accusing the bank of attempting to circumvent the judicial process.
They said they would pursue legal sanctions against the banks and their agents over the planned sale.
The Court of Appeal is yet to determine the substantive appeal concerning the disputed audit process.
The latest development adds another layer to the protracted financial and legal dispute, which places the future of the Matugga pharmaceutical manufacturing project and the ownership of the advertised properties at the centre of the controversy.
