By Mulengera Reporters
Equity Bank Uganda and Equity Bank Kenya have secured a significant legal victory after the High Court dismissed an application by Dei Industries International and its proprietor, Dr. Matthias Magoola, seeking to stop an independent audit in a protracted dispute over multimillion-dollar loan facilities.
In a ruling that clears the way for the case to proceed, Justice Susan Abinyo held that Dei Industries and Magoola had failed to provide evidence that the audit process or the Institute of Certified Public Accountants of Uganda (ICPAU) had compromised the independence of the exercise.
The dispute dates back to August 2024 when Dei Industries International Ltd, Dei Biopharma Ltd and Dr Magoola sued the two banks, alleging irregularities in the management of several loan facilities and current accounts. They sought a court-ordered reconciliation of the loans, refunds of alleged unlawful debits and an injunction stopping the banks from enforcing loan recoveries until the case is concluded.
Both sides initially agreed that KPMG would conduct an independent audit, an arrangement adopted by the court in December 2024. However, after KPMG completed its assignment, Dei Industries successfully applied to have its appointment revoked, leading the court to direct ICPAU to nominate a new independent auditor.
ICPAU subsequently appointed Clayton & Company of Jinja, which collected documents from both parties and filed its audit report in court on June 28, 2025.
Before the report was filed, Dei Industries and Magoola returned to court, asking Justice Abinyo to revoke ICPAU’s appointment, halt the audit process and allow amendments to their original lawsuit, arguing that the accounting body’s independence had been compromised.
Representing Dei Industries, senior lawyer Fred Muwema argued that Equity Bank’s Head of Legal, Elizabeth Nayiga, was not competent to defend the conduct of the auditors because she neither belonged to ICPAU nor participated in the audit. He also maintained that his clients should be allowed to amend their pleadings to reflect new developments.
But Equity Bank’s lawyer, Sim Katende, opposed the application, arguing that the central issue in the dispute remained the determination of the actual amount owed under the loan facilities. He told the court that an independent audit was the only credible way to establish whether wrongful debits, predatory lending or outstanding balances existed.
Katende further argued that Dei Industries was attempting to abandon an audit process it had originally requested and emphasized that ICPAU’s role was limited to nominating an auditor in compliance with the court’s earlier orders.
Justice Abinyo agreed with the banks on all the major issues.
She ruled that Nayiga was entitled to swear the replying affidavit in her capacity as Equity Bank Uganda’s Head of Legal, relying on information obtained through her office and official records.
The judge also found that ICPAU had properly executed the court’s directive by independently appointing Clayton & Company without consulting the parties, saying such consultation would have undermined the auditor’s independence.
She further held that Dei Industries and Magoola had failed to substantiate allegations that ICPAU’s independence had been compromised.
Having found no basis for interfering with the audit process, the court declined to revoke ICPAU’s appointment and also rejected the application to amend the plaint, noting that any subsequent loan payments could instead be addressed through evidence during the trial.
Justice Abinyo dismissed the application and directed that the main suit proceed to hearing on November 13, 2026, marking another procedural victory for Equity Bank as the long-running loan dispute moves toward full trial. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
