Kampala, UG – United Bank for Africa (UBA) Uganda finds itself embroiled in a legal and financial scandal following allegations that nearly Shs 1 billion ($250,000) has disappeared from a client’s account.

The client, EPA Carriers and Logistics Limited, has taken legal action, filing a civil suit in the High Court after reportedly discovering the missing funds earlier this year.

The incident, which came to light in April 2024, has raised serious questions about UBA Uganda’s internal processes and accountability, despite the bank’s public denial of any wrongdoing.

Meanwhile, UBA Uganda has categorically refuted the claims, calling them “spurious, false, and unfounded.”

However, the situation has only intensified with the filing of Civil Suit No. 0136 of 2024 by EPA Carriers and Logistics Limited, alleging that the bank failed in its duty to protect the client’s funds.

Allegations and Legal Action

EPA Carriers and Logistics Limited, a long-standing client of UBA Uganda since 2013, discovered the alleged loss of nearly Shs 1 billion from its account and immediately escalated the matter. The company, through its legal representatives, demanded that UBA Uganda return the funds within seven days or face legal action. When the bank reportedly failed to comply, the client proceeded with a lawsuit, accusing UBA of negligence and breach of trust.

The lawsuit highlights a discrepancy between the bank’s public statements and the ongoing legal proceedings. UBA Uganda, in a press statement, reassured its customers and the public of its commitment to security and transparency. The statement read, “No such incident has occurred, and we stand by our stringent security protocols that safeguard customer accounts from any unauthorized access.”

Despite these assurances, the civil suit paints a different picture, accusing UBA Uganda of failing to fulfill its fiduciary duty to protect the client’s funds. Legal experts suggest that the case could lead to significant repercussions, including the possibility of heavy financial penalties and damage to the bank’s reputation if the court finds in favor of the client.

Internal and External Investigations

In response to the growing concerns, UBA’s parent company, United Bank for Africa Plc, has launched its own internal investigation. The bank’s headquarters oversees operations in 20 African countries and is known for its strict adherence to corporate governance and customer service standards. The decision to step in reflects the gravity of the situation and the need to safeguard UBA’s regional reputation.

At the same time, Uganda’s central bank, the Bank of Uganda, has also acknowledged receiving complaints from EPA Carriers and Logistics Limited. This has triggered an independent investigation into the matter, further intensifying the pressure on UBA Uganda to address the allegations swiftly.

The bank’s handling of the situation has drawn criticism, particularly after reports emerged that senior management figures, including the Managing Director and Executive Director, had been on leave during the crisis. Their absence, combined with the reported failure of UBA Uganda’s management to engage with the client, has fueled speculation that the bank sought to downplay the issue in order to protect its public image.

According to reports, the Executive Director (ED) had been repeatedly approached by the aggrieved client, who requested an audience to resolve the issue. However, the ED reportedly ignored these pleas, further escalating tensions between the bank and the client. Legal experts and industry observers have raised concerns about the implications of this high-profile case, warning that it could result in the dismissal of top officials if negligence is proven.

Repercussions and Industry Concerns

The scandal has sparked widespread debate within Uganda’s banking sector, with experts warning that the case could have significant financial and reputational consequences for UBA Uganda. The potential loss of trust from both individual and corporate clients could be devastating, particularly given the bank’s reliance on its strong reputation for secure banking services.

As the legal battle unfolds, the spotlight remains firmly on UBA Uganda’s management, which is now under intense scrutiny. The outcome of the case will likely set a precedent for how financial institutions in the country handle similar disputes in the future.

With the court case in progress and investigations ongoing, UBA Uganda is facing one of its most significant challenges yet. How the bank navigates this crisis will determine not only the resolution of the current dispute but also the future of its standing in Uganda’s banking landscape.