Four businessmen face arrest over Shs400m fraud

The Commercial Court in Kampala has ordered for the arrest of four city businessmen over failure to pay Shs400m that they owe Niko Insurance (U) Ltd.
According to a September 19 warrant of arrest issued by registrar Juliet Hatanga, the businessmen are Hajj Magid Bagalaaliwo, Mr Albert Nduma, Mr Consten Mutukwa and S. R. Sham.

“These are to command you to arrest Southern Union Insurance Brokers Ltd, Albert Nduma, M M Bagalaaliwo, S R Sham and Consten Mutukwa unless they shall pay to you the said sum of Shs424m together with the bailiffs fees and costs for executing this warrant  to bring ...before this court with all convenient speed,” the arrest warrant reads in part.
Kyagulanyi Kassim Court Bailiff, trading as New Buffalo Associates, was instructed to ensure that the warrant is executed before November 11.

“This also serves to direct the officers of the Uganda Police to ensure that this execution is done in an orderly manner,” the arrest order further reads.
The debt arises from an earlier judgment of the same court, which found the businessmen guilty of defrauding Niko Insurance (U) Ltd.
According to court documents, in 2012, the businessmen, who were directors of Southern Union Insurance Brokers (U) Ltd, obtained Shs156m on behalf of Niko Insurance (U) Ltd (now Sanlam General Insurance (U) Ltd) but never remitted it.
It is alleged that Southern Union Insurance Brokers (U) Ltd would solicit and take out insurance policies from various clientele of Niko Insurance. They would then collect and receive payments for the premiums from the clientele to remit the same at a commission.

But the company failed to remit the money in question to Niko Insurance, court documents add. They instead sold the company to Kinkizi Development Company Limited on January 13, 2013, a move the court interpreted as conspiracy to defraud Niko Insurance Company of its monies.
Further, it is alleged that Southern Union Insurance Brokers (u) Ltd left its known address without indicating where they had shifted to, and completely cut telephone communication.
As a result, Justice David Wangutusi on October 1, 2021, ruled against the businessmen and ordered them to jointly pay Shs117m that they owed Niko Insurance. The judge further ordered the businessmen to pay Shs50m in damages at an interest rate of 20 percent per annum from December 13, 2012, until full payment.