KCB Bank Uganda has won a major case against the shareholders of Great Lakes Coffee Company, after the High Court in Kampala ordered them to personally repay more than US$1.1 million plus interest and costs.
- •The dispute stemmed from loan facilities extended to Great Lakes Coffee, which later went into receivership in 2023.
- •The company’s two shareholders, who had signed personal guarantees, argued they should not be held liable because the firm’s receivership made repayment impossible.
- •KCB Uganda countered that the guarantees they signed in July 2022 were binding and unconditional, making them liable once the company defaulted.
Justice Susan Odongo sided with KCB Uganda, ruling that the guarantors could not defend themselves against the claim of indebtedness and that their reliance on the receivership was misplaced.
“There are no triable issues for which this court has been called upon to determine. The defence proffered by the applicant is not made in good faith. The applicants guaranteed the said debt which they have not denied should as such pay,” Justice Odongo ruled.
In late October 2024, the Ugandan government approved the injection of 5.5 billion Ugandan Shillings to support the Great Lakes Coffee Company amid concerns that the business was collapsing under heavy debt and operational strain.
This bailout drew criticism from public observers who questioned whether taxpayer funds should rescue a foreign-owned business that already faced sizable liabilities and had been placed under receivership.