By Our Reporter
Kampala -Businessman Dr. Mathias Magoola has refused to pay a loan of over Shs250 billion to Equity Bank, claiming it was illegally advanced and calculated. He has petitioned the commercial court to challenge the loan’s legality and seek an audit and reconciliation of his accounts.
Dr. Magoola, owner of DEI Biopharma Limited, alleges the loan is inflated, extortionate, and unconscionable. He claims he was compelled to take the loans to finance his businesses, including a medical plant at Matugga, Wakiso District, which was commissioned by President Yoweri Museveni after gaining fame for claims that the pharmaceutical company was about to manufacture an alleged cure for COVID-19 disease
“An order directing the defendants to credit the plaintiffs’ loan or current accounts with any amounts found to be unlawfully debited upon the taking of an account, audit, and reconciliation,” the complaint reads in part
Dr. Magoola also wants the court to order the bank to refund over Shs47.6 billion, which he claims was unlawfully debited from his accounts.
Through their lawyers, Dr. Magoola contends that they were compelled to take the loans due to an urgent need for money to finance capital-intensive projects, compounded by the bank’s threats of default and foreclosure.
However, the bank denies any wrongdoing, stating Dr. Magoola took out multiple credit facilities between 2016 and 2019. They claim he defaulted on payments, leading to the accumulation of interest and default interest.
The court documents read: “To date, despite the funds having been received and despite many oral and written requests by the defendants, the plaintiffs have refused to make any payment to the defendants to repay the outstanding loan amounts due, and every day without payment being made, the facilities accrue more interest and default interest.
“Dr. Magoola’s case comes after the government advanced him Shs578.4 billion to save his company from being auctioned by the bank. However, instead of repaying the loan, Dr. Magoola deposited the funds in another bank.
Parliament approved a Shs578 billion bailout to DEI Biopharma Limited in May, amid disagreement among Parliamentarians.