Why Equity Bank’s Move Against Dei BioPharma Threatens the Rule of Law in a Commercial Dispute

The attempt by Equity Bank (Uganda and Kenya) through auctioneers Jald (U) Ltd to sell off the strategic assets of Dei BioPharma and Dr. Matthias Magoola is not merely a commercial dispute—it is an assault on the sanctity of judicial orders.

When a financial institution chooses to bypass active court interventions, it signals a dangerous preference for raw economic muscle over due process.

The Rule of Law Cannot Be Auctioned:

At the heart of this controversy lies a clear legal reality: an active Court of Appeal order issued on September 9, 2026, which stayed proceedings in the High Court and explicitly restrained lenders from relying on a heavily contested loan audit report.

As Muwema & Co. Advocates and Solicitors rightly pointed out in their public legal notice, no lawful and final debt figure has been judicially established. When a bank rushes to advertise prime industrial and commercial lands—from the flagship pharmaceutical manufacturing plant in Matugga to sites in Luzira, Muyenga, and Seguku—while a substantive appeal on the validity of the debt is still pending, it acts in bad faith. It attempts to create a fait accompli, subverting the appellate courts before they can render a fair verdict.

Protecting a National Strategic Asset:

Dei BioPharma is not an ordinary commercial debtor. The Matugga pharmaceutical facility represents a cornerstone for Uganda’s medical independence and local drug manufacturing capacity, a vision backed by significant national interest and government investment.

The company has consistently raised alarm over opaque lending practices—pointing to inflated balances, disputed loan consolidations, a payments trail including a substantial Shs120 billion (~$30 million) disbursement in December 2024 tied to unfulfilled refinancing promises, and shifting auditor appointments from KPMG to Clayton & Co. via the Institute of Certified Public Accountants of Uganda (ICPAU).

When deep-pocketed financial institutions push for foreclosure amid such layered, unresolved accounting disputes, they risk crippling a transformative industrial project over figures that have not passed the test of independent judicial scrutiny.

A Warning to Prospective Buyers:

Muwema & Co. have issued a sobering and legally sound caution to the public: any auction conducted in defiance of a court stay cannot confer valid ownership rights. Participating in such a sale invites endless litigation, financial hazard, and legal nullification.

Equity Bank must rein in its aggressive posturing, respect the authority of the Court of Appeal, and allow the independent legal and audit processes to run their course. Justice cannot be foreclosed by an advertisement in the daily papers.