TOP STORY: Court orders arrest of Dei director Magoola over UGX. 268 billion debt to ex-minister Musumba

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KAMPALA — The Commercial Division of the High Court in Kampala has ordered for immediate arrest of Mr. Matthias Magoola, the director of Dei Natural Products International Ltd (Dei), which is part of the Dei Group for defaulting on USD 72,437,850 about UGX. 268 billion payment to former Urban Development Minister Isaac Musumba.

According to the warrant arrest issued on Friday, February 25 by Ms. Juliet Hatanga, the Commercial Court Registrar, the court has ordered bailiff Mr. Twine Muganga to arrest Mr. Magoola and produce him before Court with all “convenient speed”.

“These are to command you to arrest the said Magoola Mathias/Appellant and unless the said Magoola Mathias shall pay to you the sum of Ug. Shs 268,020,045,000/= and as costs of executing this process to bring the said Magoola Mathias/Appellant before the Court with all convenient speed,” Court ordered.

“You are further commanded to return this warrant on or before the 25th day of March 2022 with an endorsement certifying the day on which and the manner in which it has been executed, or the reason why it has not been executed”.

The police has been requested to facilitate the process.

“This serves to request every Police Officer of the Uganda Police Force to ensure that the execution is done in an orderly manner”.

Court was compelled to issue the warrant of arrest and warrant of attachment for Mr. Magoolas properties after a hearing on Thursday February 24, after the Dei Minerals legal team faailed to explain why M/S Isaac Isanga Musumba & Co. Advocates have not been paid its legal fees of 72,437,850 USD which is 30 percent of the decratal sum for representing Dei International Ltd and Mr. Magoola Matthias in a case against Videocon Industries Ltd, where the latter were compensated with USD 200 million.
Mr. Musumba’s pay is 30 percent of the decretal sum.

The warrant of arrest issued Friday comes after Mr. Gilbert Nuwagaba and Carol Aparo the lawyers representing Mr. Musumba moved Court to enforce attachment of Mr. Magoola’s assets.

Both parties had in July 2019 entered into consent agreemebt before Justice David Wangututsi with both agreeing that M/S Isaac Isanga Musumba & Co.Advocates is entitled to the said amount which is about UGX 268 billion.

“And that Videocon Industries Ltd lawyers had to deploy their best efforts to recover the decretal amount from the Judgement debtor and shall keep respondents (Isaac Musumba) informed and notified of the progress of recovery and matters related in the UK Court,” the consent order reads in part.

Court rejected Mr. Magoola’s legal team pleas that they are yet to recover the decretal sum following another court process ongoing in the UK.
Mr. Musumba’s legal team submitted that such a reason was dishonest and meant to to muslead court.

“For the last 2 years they have kept quiet on Lawyer’s fees for doing work; so execution has to go on,” Mr. Musumba’s Attorney Nuwagaba submitted.

The court inquired if the two lawyers had been in touch on this matter and whether she could stand it over and give them time to talk; but Counsel Nuwagaba asked Court to challenge Mr. Musumba’s legal team to come with a document from UK to show that money has not been paid.

“There’s no document on progress from the case in UK; your client has an obligation to pay Lawyer’s fees,” Nuwagaba said.

Background:
In 2006, Dei Minerals International Ltd and it’s Managing Director Magoola Matthias applied and obtained two mining licences; Kirwa Wolfram mines located in Kisoro District and Mwerasandu Tin mines located in Ntungamo District.
Mr. Magoola also acquired a location licence inrespect of Mwerasandu Tin mines which Magoola later surrendered to government to pave way for the transfer of licences to Videocon Natural Resources PLC; because he was very attractive to foreign investment.

So in that very year 2006; agents of Videocon Industries Ltd an Indian Company approached Magoola and made proposals of a joint venture.
They entered into a Memorandum of Understanding and agreed to form a new company floated in London so as to enable the new entrants to get shares.

The parties also agreed that on the incorporation of the new company Videocon Natural Resources PLC; Magoola would transfer the licences to Videocon Industries Ltd plus 99 percent of Dei Minerals International Ltd shares to the new company while Videocon was to inject USD 100 million in the project.

However, Videocon Industries Ltd failed to inject the USD 100m which rendered the operations of the Mines impotent; were in breach of their obligations in the contract and it was Videocon’s duty to return Dei Minerals International Ltd and Magoola Matthias to the position that they had been in before they entered into Business Relationship with Videocon Industries.

This meant that the Plaintiffs (Dei and Magoola) had to recover their mining licences that had been cancelled by government.
They were compensated with USD 200 million on the dispute and represented by Mr. Musumba as their lawyer.
Mr Magoola who runs a multibillion pharmaceutical factory in Matugga, Kampala rose to prominence at the height of the Coronavirus pandemic when he was introduced to President Museveni together with his American partners by former Speaker Rebecca Kadaga that they had discovered a cure for the deadly virus.
It turned out that they were only proposing to manufacture sanitisers.