Court Clears Way for Independent Audit in Dei Industries–Equity Bank Loan Dispute

July 31, 2026 in Companies, Finance, Trade & Industry by Editor

The High Court has dismissed an application by Dei Industries International and its proprietor, Dr Matthias Magoola, seeking to halt an independent audit in their loan dispute with Equity Bank Uganda and Equity Bank Kenya. The ruling clears the way for the main commercial case to proceed to hearing in November.

 

The High Court in Kampala has dismissed an application by Dei Industries International Ltd, seeking to halt an independent audit in a long-running commercial dispute with Equity Bank Uganda Ltd and Equity Bank Kenya over disputed loan facilities.

In a ruling delivered by Justice Susan Abinyo, the court found that Dei Industries had not presented sufficient evidence to support claims that the independence of the audit process had been compromised.

The decision allows the court-ordered audit process to remain part of the proceedings as the main suit moves towards a full hearing scheduled for November 13, 2026.

The dispute dates back to August 2, 2024, when Dei Industries International Ltd, Dei Biopharma Ltd and Dr Magoola sued Equity Bank Uganda and Equity Bank Kenya over several loan facilities and current accounts.

The companies contend that the banks improperly managed their loan accounts following a series of restructurings and consolidations. They are asking the court to establish the correct outstanding balances, if any, and to order the banks to reverse any sums allegedly debited unlawfully from their accounts.

They also sought orders restraining the banks from undertaking loan recovery or enforcement actions pending determination of the case.

As part of efforts to resolve the accounting questions at the centre of the dispute, both parties initially agreed that KPMG would conduct an independent audit of the loan facilities. The agreement was adopted by the court in December 2024, and KPMG subsequently completed its work and submitted a report.

However, the parties later disagreed over the process, prompting Dei Industries and Dr Magoola to successfully apply for the KPMG appointment to be set aside. The court subsequently directed the Institute of Certified Public Accountants of Uganda (ICPAU) to nominate another independent audit firm.

ICPAU appointed Clayton & Company of Jinja, which proceeded to issue terms of reference, receive documents from the parties and prepare an audit report that was filed before the court.

Before the report was submitted, Dei Industries and Dr Magoola filed another application seeking to revoke ICPAU’s role in the process. They argued that the institute’s independence had been compromised and also sought permission to amend their original plaint.

Equity Bank opposed the application, maintaining that the central issue before the court remains the determination of the actual amounts owed under the various loan facilities. The banks argued that an independent audit was necessary to establish the status of the accounts and resolve the competing claims.

In her ruling, Justice Abinyo rejected the applicants’ challenge to the affidavit filed by Equity Bank Uganda’s Head of Legal, Elizabeth Nayiga, holding that she was competent to swear the affidavit based on information available to her in the course of her duties.

The judge also found that ICPAU had fulfilled the court’s earlier directive by independently appointing Clayton & Company without requiring consultation with either party.

Justice Abinyo said no evidence had been presented to demonstrate that ICPAU had failed to act independently in carrying out its mandate.

The court further declined to revoke ICPAU’s appointment or permit amendments to the original plaint at this stage, noting that any subsequent developments relating to payments or account transactions could be addressed through evidence during the hearing of the main suit.

With the application dismissed, attention now shifts to the substantive hearing, where the court will consider the parties’ competing claims over the management of the loan facilities and determine the amounts, if any, outstanding between the parties.

The ruling marks another procedural milestone in a case that has attracted considerable attention within Uganda’s banking and business sectors because of the size of the lending relationship and the broader questions it raises about loan reconciliation, restructuring and independent financial audits in commercial disputes.