Prospective buyers of properties linked to businessman Mathias Magoola have received two opposing messages: Dei’s lawyers say keep away, while Equity’s say the sale is proceeding.
Behind the competing notices lies a dispute involving bank demands of Shs82b and $43m when the companies went to court in 2024, a subsequent payment of Shs120b, and an audit assessment that remains contested.
Now, with a pharmaceutical factory, a wheat mill and other properties facing sale, the confrontation has moved beyond disagreements over the accounts to a battle for the confidence of prospective buyers.
Muwema and Company Advocates, representing Dei BioPharma, Dei Industries International and Magoola, have warned that participating in the proposed auction would expose buyers to risk.
Katende, Ssempebwa and Company Advocates, acting for Equity Bank Uganda and Equity Bank Kenya, have responded by inviting the public to participate, insisting that no court order stops the sale. The exchange brings the dispute to a sharper point: can the banks proceed with the advertised auction?
The battle for buyers
The immediate confrontation follows a November 5 notice by auctioneers Jald offering properties mortgaged as security for loans advanced to the two Dei companies.
The properties identified in Dei’s subsequent response include factory premises in Matugga, property in Luzira, Kitende, Katwe, Muyenga and Seguku.
For the banks, the proposed sale is a step towards recovering unpaid loans. For Dei, it threatens the disposal of assets before the disputed indebtedness has been finally established through the court process.
In their Monday notice, Dei’s lawyers argued that selling the properties would pre-empt a court-ordered audit and reconciliation intended to determine what their clients actually owed.
They maintained that no legitimate outstanding balance had been ultimately established that could justify the advertised recovery.
Equity’s lawyers reject that position. They say the auction is proceeding under the Mortgage Act and does not amount to contempt of court.
‘We also confirm that there is no order of any court staying or stopping the proposed sale,’ the lawyers state.
They further urge the public to disregard Dei’s warning.
Those competing statements leave buyers facing a dispute that neither public notice can resolve: whether the proposed sale falls within the protection afforded by existing court orders.
The money in dispute
The figures illustrate why the disagreement over the accounts matters.
According to Dei’s November 9 notice, the companies filed their suit in August 2024 challenging demands for Shs82b and $43m. They alleged irregularities in the calculation of principal, interest and loan balances during restructuring.
Those are the borrowers’ allegations, which the banks contest.
Dei’s lawyers also say their clients paid Shs120b, which they described as equivalent to $30m, in December 2024.
They allege that the payment followed promises of refinancing for the Matugga pharmaceutical project that were not honoured.
That account of the payment and the circumstances surrounding it remains Dei’s position.
The latest response from Equity’s lawyers does not address the alleged refinancing promise or provide a reconciliation showing how subsequent payments affected the outstanding balances.
The earlier demands, therefore, cannot simply be treated as the amount due today.
A later audit, also disputed by Dei, assessed indebtedness at approximately $39.91m as at June 28, 2025.
That figure relates to a particular date and does not, by itself, establish the amount presently recoverable.
The amounts also cannot be placed side by side as though they represent the same accounts at the same moment. The original demands preceded the reported December payment, while the subsequent assessment came after it.
What remains necessary is an account showing the facilities covered, payments credited, interest charged, and balances outstanding.
Equity’s response to the public warning does not supply that breakdown.
When the audit became another dispute
The process intended to settle the disagreement over the money has itself generated further litigation.
In December 2024, the High Court, acting on the parties’ consent, appointed KPMG to conduct a comprehensive audit of the loan arrangements and determine the outstanding amounts owed by the two Dei companies.
The parties were to share the auditor’s costs equally. Dei was required to submit its internal report, although KPMG was directed to proceed even if that submission did not arrive within the prescribed period.
The arrangement offered both parties a common route towards establishing the state of the accounts. Instead, questions about the auditor’s independence and the nature of its work became further points of contention.
In an affidavit filed in response to Dei’s objections, KPMG’s country managing partner, Stephen Ineget, defended the firm’s work and denied that it had a business or financial relationship with the banks constituting a conflict of interest.
He said KPMG had considered the documents submitted by both parties and followed a framework for agreed-upon procedures, reporting factual findings from the work undertaken.
Ineget also said only the banks signed the engagement letter confirming the terms and procedures. KPMG maintained that its procedures were comprehensive enough to determine the outstanding loan amounts required by the court.
KPMG also addressed the relationship cited in the independence dispute. Ineget said its work with Nation Media Group involved validating financial information submitted by participants in the Top 100 Mid-sized Companies Survey.
He said Equity’s separate sponsorship of the survey did not create a conflict of interest for KPMG.
The exchanges show how establishing a loan balance became bound up with disagreements over who should examine the accounts and under what terms.
According to Dei’s November 9 notice, KPMG’s appointment was subsequently revoked, and the Institute of Certified Public Accountants of Uganda was directed to nominate an independent replacement.
The appointment of Clayton and Company also drew objections from Dei, which challenged the replacement audit process.
Dei’s lawyers acknowledge that the High Court dismissed that challenge in July, but say their clients appealed and obtained a September 9 order staying High Court proceedings pending determination of the appeal.
What remains unanswered
The latest exchange follows the Court of Appeal’s September 9 order staying High Court proceedings pending determination of Dei’s appeal.
In their response, Equity’s lawyers say no court order stays or stops the proposed sale.
They maintain that the auction is lawful under the Mortgage Act and does not constitute contempt of court.
The notice does not state the amount currently being sought from the borrowers or provide a breakdown by property.
Dei’s lawyers, meanwhile, maintain that the outstanding loan balances remain subject to the disputed audit and court process.
They argue that selling the properties before that process is concluded would pre-empt the determination of their clients’ indebtedness.
In their November 9 notice, they said they were seeking legal sanctions against the banks and their agents over the proposed sale.
Equity’s lawyers have urged members of the public to disregard that warning and participate in the auction.
The companies continue to contest the proposed sale, while the banks maintain that it will proceed.