The threatened auction of properties belonging to businessman Dr Mathias Magoola and his Dei Group of Companies has opened a fresh chapter in one of Uganda’s most controversial public-private investment ventures, raising questions about corporate indebtedness, political influence, accountability and the protection of taxpayers’ money.
At the centre of the unfolding controversy is Dei BioPharma, the ambitious pharmaceutical and biotechnology project in Matugga, Wakiso District, which President Yoweri Museveni has championed as a potential game-changer for Uganda’s pharmaceutical industry.
The latest auction notice, published on November 5, 2026, places several properties associated with Magoola and his companies in the path of debt recovery, including the Matugga pharmaceutical factory, a wheat-milling facility in Luzira, a hospital property in Kitende and other commercial and residential properties in Kampala and Wakiso.
The development is particularly striking because it comes after government committed approximately Shs723.4 billion in public funds to Dei BioPharma, ostensibly to support the pharmaceutical investment, settle financial obligations and facilitate the development of a domestic manufacturing industry.
For taxpayers, the central question is no longer simply whether Magoola’s pharmaceutical dream can succeed. It is whether government adequately protected its investment, what security it obtained in return for the money and whether the industrial ambitions of Dei can survive the financial dispute now threatening assets associated with the enterprise.
The 30-day countdown and the lawyers’ counterattack
The notice issued by Jald (U) Ltd, a Kampala-based debt collection and auctioneering firm, gives Dei Industries International Ltd and its guarantors an opportunity to clear the outstanding loan balances, accumulated interest, fees and recovery costs before the proposed disposal of the properties.
The advertisement, dated November 5, provides for the sale by public auction or private treaty. It also directs occupants to vacate the affected premises within 14 days to allow prospective buyers to inspect the properties, with the proposed sale scheduled 30 days after publication.
Among the most consequential properties is the industrial establishment in Matugga, registered under Dei Industries International Ltd and Dei Natural Products International Ltd. The property comprises approximately 20.673 acres under Kyadondo Block 82, including plots 988, 3325 and 3326.
The other assets include an operational wheat-milling plant along Sixth Link Road in Luzira, properties in Kyamuli-Kungu and Katwe, a residential property in Muyenga, a hospital in Kitende and commercial premises in Seguku. The development has prompted an aggressive legal response from Magoola’s camp.
Through their lawyers, the Dei companies have identified Equity Bank Uganda and Equity Bank Kenya as the financial institutions behind the recovery exercise. They dispute the banks’ computation of the outstanding balances and argue that the proposed auction is premature because the indebtedness remains subject to a contested audit and reconciliation process.
Their position is that no final outstanding balance or interest payable has been conclusively established for recovery. They have also indicated that they are pursuing legal sanctions against the banks and their agents.
The dispute is particularly complicated by the involvement of lawyer Fred Muwema, whose firm, Muwema & Co. Advocates, has represented the Dei companies in the proceedings against the two Equity banking entities.
In September, the Court of Appeal stayed proceedings in the underlying High Court commercial dispute pending determination of the intended appeal. The appeal concerns questions surrounding the independent audit and its use in establishing the companies’ indebtedness.
The lawyers’ argument is therefore that the banks should not proceed as though the disputed figures have become an unquestionable final determination of the amount owed.
This places the auction in a complicated legal position: the banks are pursuing recovery of facilities they maintain remain unpaid, while the borrowers challenge the computation of those obligations and the process through which the figures were established.
Equity has denied wrongdoing and maintained that the debts arose from contractual lending arrangements and defaults. The disagreement must ultimately be resolved through the courts.
The caveat reportedly issued by Magoola’s lawyers is intended to warn prospective purchasers, investors and other participants in the proposed sale that the properties are subject to active legal contestation.
For anyone considering bidding, the implications are substantial. A purchaser would need to establish the legal status of the security, the applicable court orders, the ownership of the particular property and the consequences of the pending litigation.
The legal distinction is important: a public auction notice is not itself proof that a disputed debt has been judicially established, just as a borrower’s caveat does not automatically extinguish a lender’s contractual recovery rights.
How the banking dispute developed
The current confrontation did not emerge overnight. It is the culmination of a protracted financing relationship between Magoola’s business interests and Equity Bank Uganda and Equity Bank Kenya.
The borrowing was intended to finance the development of pharmaceutical manufacturing facilities at Matugga and other associated business operations.
The disagreement became more pronounced after the lenders issued demands in June 2024 involving Shs82.24 billion claimed against Dei Industries under Equity Bank Uganda and $43.23 million claimed against Dei BioPharma under Equity Bank Kenya.
The Dei companies challenged the demands, alleging excessive interest, wrongful debits and improper allocation of repayments.
Among their complaints were disputed interest calculations on a Shs54.79 billion facility, alleged wrongful debits of approximately Shs47.65 billion and disagreement over the treatment of a $9 million repayment.
Equity disputed the allegations, maintaining that the interest and outstanding balances were calculated in accordance with the loan agreements. The dispute subsequently became entangled in competing audit processes.
In March 2025, the High Court set aside the appointment of KPMG as auditor and expunged its report, directing the Institute of Certified Public Accountants of Uganda (ICPAU) to nominate another independent firm.
ICPAU subsequently nominated Clayton & Company. The Dei companies challenged that appointment, but the High Court dismissed their application in July 2026.
They then pursued an appeal, prompting the Court of Appeal on September 9, 2026, to stay proceedings in the main case pending determination of the intended appeal.
The latest auction notice has consequently reopened the confrontation between the banks and Magoola’s companies at a time when the underlying litigation remains unresolved.
The Shs723.4 billion taxpayer question
Perhaps the most troubling dimension of the impending auction is its timing. Uganda’s government has committed Shs723.4 billion to Dei BioPharma, making it one of the country’s most substantial public investments in a privately operated industrial enterprise.
The money was released in three major instalments. The first was Shs70 billion appropriated in the 2023/2024 financial year. Another Shs75 billion followed in December 2023, before Parliament approved a supplementary allocation of Shs578.4 billion in April 2024.
The supplementary funding was intended to support debt obligations and operational requirements associated with the pharmaceutical manufacturing project.
However, the Auditor-General’s December 2024 report raised serious questions about the transaction.
Auditor-General Edward Akol reported that his office had not received a valuation report establishing the company’s net worth before government invested in it. He also said the shareholder agreement had not been provided and government had yet to receive share certificates.
The audit raised the fundamental question of whether government had received shares equivalent to the public funds committed.
The Auditor-General recommended that the Secretary to the Treasury engage the Attorney-General and the company to secure the relevant purchase agreement and share certificates.
Almost two years later, Parliament was still demanding answers. On October 6, 2026, the Committee on Presidential Affairs reported that government held a 9.4 per cent stake in Dei BioPharma but said documentary proof of the shareholding had not been presented during its assessment.
The committee called for proper documentation of government shares, expected returns, deliverables and measurable performance targets.
It also established that the facility was operating below its anticipated capacity. During the 2024/2025 financial year, six generic medicines had been produced and distributed, while specialised production lines were still undergoing installation, validation and commissioning.
The committee further reported that another $434 million was required to complete and fully operationalise the facility. This is where the auction becomes a matter of national economic concern.
If a facility built partly through public financing is exposed to foreclosure proceedings, government must explain what legal protection exists for its investment and whether its reported shareholding gives it sufficient rights to protect the enterprise.
It is not enough for government to announce that it owns a minority stake. Taxpayers need to know whether that stake is legally secured, what assets underpin the investment and what happens if creditors enforce their security.
From COVID-19 controversy to presidential patronage
Magoola’s rise to national prominence is closely associated with the COVID-19 pandemic, when he emerged as one of the businessmen claiming that Uganda could develop local pharmaceutical solutions to the deadly virus.
A trained biochemist and founder of the Dei Group of Companies, Magoola presented himself as an entrepreneur determined to move Uganda beyond dependence on imported medicines and vaccines.
His breakthrough into the political establishment came in March 2020, when then Speaker of Parliament Rebecca Kadaga introduced him and American scientist Professor Sarfaraz Niazi to Parliament and subsequently facilitated their engagement with President Museveni.
Kadaga told Parliament that Uganda would begin producing a coronavirus treatment within a fortnight. She said: “A professor who manufactured the treatment for Coronavirus in the US has donated the patent to Uganda. Within a fortnight, the treatment will be right here, it will be available on the market here in Uganda. It’s being made by a company called Dei International.”
Her remarks generated excitement at a time when governments worldwide were desperately searching for solutions to the pandemic. However, the promised coronavirus cure did not materialise as announced. Subsequent scrutiny of the product revealed that it was a disinfectant or sanitising product rather than an approved COVID-19 treatment. The Uganda Medical Association also questioned the claims. The episode nevertheless established Magoola as a businessman with access to some of the country’s most powerful political offices.
His relationship with Museveni subsequently evolved into a political and commercial partnership around the vision of establishing a large-scale pharmaceutical and biotechnology manufacturing industry in Uganda.
On July 6, 2021, Museveni and then Kenyan Deputy President William Ruto presided over the foundation-stone ceremony for the biological drugs and mRNA vaccine manufacturing facility at Matugga.
The event brought together senior government officials, health-sector representatives and international scientists.
Museveni presented the investment as part of a broader African struggle to develop domestic capacity in pharmaceutical manufacturing rather than depend on foreign suppliers.
In his address, he discussed the importance of biological materials and research capacity, explaining how Uganda had acquired the scientific resources needed to develop vaccine manufacturing.
He also praised Ruto for his involvement in helping secure financing through Equity Bank.
Ruto, in turn, described the project as an important East African investment and praised Magoola as a Ugandan entrepreneur whose ambitions could benefit the region.
The Kenyan leader said he was representing East Africans living in Kenya as a demonstration of brotherhood among the East African nations.
The appearance of two influential regional leaders at the launch gave the project considerable political visibility and strengthened expectations that Dei would become a major pharmaceutical manufacturing centre.
For Magoola, the political backing was significant. It helped transform a private industrial venture into a national strategic project associated with Uganda’s ambitions for scientific independence.
Museveni’s personal investment in Magoola
President Museveni has remained one of Magoola’s most prominent political supporters. The President has repeatedly defended the need to support Ugandan scientists and entrepreneurs, arguing that the country cannot industrialise if its innovators are left without the financial and institutional support needed to commercialise their ideas.
In February 2024, Magoola publicly thanked Museveni for supporting his pharmaceutical ambitions, crediting the President with encouraging him to continue developing his research and manufacturing capabilities.
The businessman described the President’s support as instrumental in overcoming the challenges facing Ugandan scientists.
The relationship was again demonstrated in June 2026, when Museveni challenged veteran journalist Andrew Mwenda to visit Magoola’s factories before dismissing the pharmaceutical investment.
The President’s message to Mwenda was that journalists should investigate the projects they criticise rather than rely on assumptions or the opinions of others. “You are supposed to be a journalist. Why do you not interview these ‘conmen’ such as Magoola and Senfuka? Visit Magoola’s factories in Matugga and Kamuli.”
The President’s intervention was revealing. It demonstrated how personally invested he had become in defending the Dei project against criticism.
For Museveni, Dei represents more than a private pharmaceutical business. It is part of his broader political narrative about indigenous industrialisation, local scientific innovation and reducing Uganda’s dependence on imported medicines.
But that political investment also creates a difficult accountability question: can a project enjoy presidential backing while remaining subject to the same commercial, financial and regulatory scrutiny as other private enterprises? The answer is particularly important when hundreds of billions of public funds are involved.
Andrew Mwenda’s dramatic U-turn
One of the most interesting chapters in Magoola’s political and media relationships involves veteran journalist Andrew Mwenda.
Mwenda was initially among the most vocal critics of the government’s decision to commit hundreds of billions of shillings to the Dei pharmaceutical project.
In an April 2026 commentary, he questioned Magoola’s credibility and described him as a conman, while criticising Museveni’s decision to support a privately owned enterprise with public money. However, following Museveni’s challenge, Mwenda travelled to Matugga on June 26, 2026, where he spent approximately six hours inspecting the pharmaceutical and biotechnology complex. His assessment changed dramatically.
After touring the facilities, interviewing staff and listening to Magoola’s explanations, Mwenda apologised for his earlier criticism, acknowledging that he had not adequately investigated the project before forming his opinion. He said: “I have talked to the staff, listened to Magoola’s explanations, and I am inclined to believe that investing in something like this can be very good for the country.”
He also praised the size of the plant, its machinery and Magoola’s ideas, describing what he had seen as impressive. Mwenda subsequently acknowledged Museveni’s intervention, saying:
“So, Mr. Yoweri Museveni, I want to appreciate you, and I want you to know that your advice was taken seriously.” The journalist went further, arguing that the pharmaceutical project could generate enormous economic returns if government supported its products through domestic procurement.
He suggested that even a successful single drug could justify a substantial public investment. However, Mwenda also raised an important concern: government institutions continued importing medicines despite the taxpayer investment in a local manufacturing facility.
His position illustrates the competing arguments surrounding Dei. On one hand, Uganda needs ambitious domestic industrial investments; on the other, such investments must demonstrate commercial viability, operational progress and accountability. The impending auction now places that debate in an entirely different context.
A project once defended as a potential national industrial champion is facing questions about the financial liabilities attached to its associated businesses.
The wider Dei business empire
Although Dei BioPharma has attracted the greatest political attention, Magoola’s business interests extend beyond pharmaceutical manufacturing.
The wider Dei business portfolio includes pharmaceutical production, natural products, food processing, wheat milling and healthcare-related investments.
The inclusion of the Luzira wheat-milling plant and the Kitende hospital property in the latest auction notice demonstrates how the financial dispute extends beyond the Matugga pharmaceutical complex.
It also raises questions about the relationship between the different companies, their borrowing arrangements and the properties pledged as security.
The distinction matters because Dei BioPharma, Dei Industries International and Dei Natural Products International are separate corporate entities. The fact that properties associated with these businesses appear in one recovery notice does not automatically mean that every liability belongs to Dei BioPharma or that every asset is owned by the pharmaceutical company.
Nevertheless, the financial difficulties facing the wider group could affect Magoola’s ability to complete the pharmaceutical project.
The stakes are particularly high because the Matugga facility has been presented as a potential continental centre for manufacturing vaccines, cancer medicines, biological drugs and other specialised pharmaceutical products.
Magoola has previously spoken of ambitions to manufacture more than one billion doses of mRNA vaccines annually and establish Uganda as a major pharmaceutical production centre.
He has also projected tens of thousands of employment opportunities from the Matugga and Kamuli investments. These remain company ambitions rather than independently established employment outcomes.
The political dilemma facing Museveni
The latest auction threat presents Museveni with a difficult political and economic dilemma.
His administration has invested enormous political capital in promoting Magoola as an example of what indigenous entrepreneurs can achieve when government supports local innovation.
The President has defended the investment against critics, encouraged journalists to inspect the facilities and presented the project as an important part of Uganda’s industrial transformation.
But the appearance of the pharmaceutical factory among properties advertised for disposal creates an uncomfortable contradiction.
How can government continue defending an investment of Shs723.4 billion without establishing whether the company has sufficient legal protection, whether the money was properly accounted for and whether the public has received the ownership rights it was promised?
The government has reportedly secured a 9.4 per cent stake, but Parliament has questioned the documentary evidence supporting that ownership.
There is also the question of whether the public investment helped create new industrial capacity or whether a substantial portion went towards resolving existing financial obligations.
The Auditor-General’s findings and the Parliamentary Committee on Presidential Affairs’ subsequent assessment suggest that these questions cannot be dismissed as political criticism.
They require documentary answers.
The Finance Ministry’s acting director of economic affairs, Moses Kaggwa, said that the share purchase agreement had been cleared by the Attorney-General. However, further details about the valuation, share certificates and implementation of the ownership arrangements were not provided. Government must therefore explain its position before the proposed auction proceeds.
What happens next?
The immediate battle is likely to be fought through the courts, where the banks and Magoola’s companies must establish their respective positions on the outstanding facilities, interest calculations, repayments and enforcement rights.
For Equity Bank Uganda and Equity Bank Kenya, the issue is recovering money advanced under contractual lending arrangements.
For Magoola, the challenge is protecting his business empire against what his lawyers consider an unjustified recovery process while pursuing the outstanding legal disputes.
For government, however, the matter is considerably bigger. The possible disposal of the Matugga factory raises questions about the protection of a major public investment, the future of Uganda’s pharmaceutical manufacturing ambitions and the accountability of public officials who negotiated and approved the financing.
It also places the President’s industrialisation agenda under scrutiny. If the factory is eventually sold, government could find itself having invested hundreds of billions of shillings in a private enterprise whose most important industrial asset has passed into the hands of creditors or third-party purchasers.
If the auction is halted, that alone will not resolve the underlying financial problems. The companies and their lenders will still need to establish a sustainable settlement, while government must demonstrate that its investment is protected.
Ultimately, the Magoola saga is becoming a test of whether Uganda can combine presidential ambition, private entrepreneurship and public financing without compromising accountability.
The country needs pharmaceutical factories, indigenous industrialists and domestic scientific innovation. But it also needs transparent investment agreements, credible valuations, enforceable shareholder rights and responsible management of taxpayers’ money.
Magoola may yet realise his ambition of turning Dei into a major African pharmaceutical manufacturer. His supporters, including Museveni and Mwenda, believe the potential rewards justify supporting the venture.
But the impending auction has introduced a more immediate question: who will own the machinery, land and industrial infrastructure when the legal and financial battles are finally resolved?
For the Ugandan taxpayer who has already contributed Shs723.4 billion, that is no longer simply Magoola’s private business problem. It is a matter of national accountability.
Author Profile
- Charles Gazza Kodili is a seasoned journalist with over 20 years of experience in the media industry. He holds a Bachelor of Arts degree in Mass Communication. He’s currently the Chief Editor at the Investigator.
Charles can also be reached via; Tel: +256 774 108978
Email: [email protected]
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