Court orders ex-MP Kabushenga to refund sh405m
Kabushenga denied misappropriating the funds, arguing that the donations had been used for the agreed projects. He also challenged the donors’ legal capacity to sue and argued that the case was an attempt to take control of the institutions he had established.
Court orders ex-MP Kabushenga to refund sh405m
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The High Court Commercial Division has ordered former Kinkiizi East MP Bishop Hamlet Kabushenga Mbabazi to refund sh405.45m to Great Lakes Regional University Ltd and CHIFCOD Social Enterprise Ltd after finding that he had failed to account for the institutions’ money.
In a judgment delivered on October 28, 2026, by Justice Anna Mugenyi, the court ordered Kabushenga to pay interest at 10% per annum on the money from January 12, 2022, until payment in full, as well as the two institutions’ legal costs.
The judgment arose from a civil suit filed in January 2022 by five plaintiffs, including three foreign donor organisations and the two Ugandan institutions. The case concerned the management of funds intended to support education and healthcare services in Kanungu district.
The court found that Great Lakes Regional University Ltd and CHIFCOD Social Enterprise Ltd had proved that Kabushenga received sh405.45m belonging to them between October 2016 and December 2019 but failed to account for the money.
However, the court dismissed the claims brought by the three donor organisations: Kirima Ltd of England and Wales, Uganda Development Initiative of the United States, and the Protestant Church of Eppingen in Germany.
The plaintiffs had sought sh300m in general damages, but Justice Mugenyi declined to award the money, ruling that no additional loss beyond the amount they sought to recover had been proved.
The judge also declined to issue a blanket order requiring Kabushenga to account for all funds disbursed to him since 2007.
The case arose from a partnership between Kabushenga and the foreign donors to support education and healthcare in Kanungu district.
Kabushenga founded the Child to Family Community Development Organisation (CHIFCOD), under which several schools were established, including Kirima Parents Primary School, Nyamirama Parents Primary School, Rutenga Parents Primary School, Nyakabungo Parents Primary School and Great Lakes High School.
He also founded Great Lakes Regional College Ltd, initially incorporated as Kinkiizi Christian University. Great Lakes Regional University Ltd was later incorporated in 2016 to operate the university after it obtained a university licence.
The plaintiffs alleged that money deposited in the institutions’ accounts was withdrawn by Kabushenga or paid out on his instructions without proper accountability. They also accused him of using institutional funds to service loans associated with a development project in Busiro, Wakiso district.
Kabushenga denied misappropriating the funds, arguing that the donations had been used for the agreed projects. He also challenged the donors’ legal capacity to sue and argued that the case was an attempt to take control of the institutions he had established.
In evaluating the case, Justice Mugenyi examined bank statements, deposit slips, correspondence, corporate records and an audit report prepared by KSK Associates.
The judge noted that the audit report could not, on its own, establish wrongdoing and therefore examined the underlying financial records. She excluded transactions whose sources could not be adequately traced.
The court also considered Kabushenga’s correspondence concerning the handling of the institutions’ funds.
In a letter dated March 28, 2020, Kabushenga referred to loan repayments and acknowledged that CHIFCOD resources had been committed to the African Graduate Entrepreneurship (AGE) Institute project.
In a subsequent handover report, he acknowledged borrowing project funds to meet loan repayments. In an email sent in August 2021, he also stated that money belonging to Great Lakes Regional University had been used to service a loan.
Justice Mugenyi found that Kabushenga had failed to account for the sh405.45m he received from the two institutions between October 2016 and December 2019.
The judge ruled that the money had to be restored, noting that the responsibility to explain how funds withdrawn from company accounts were used rested with the person who received them.
The plaintiffs also sought to hold Kabushenga personally liable for institutional money used to service a Sh1.4b loan obtained from Post Bank Uganda.
The court found evidence that institutional funds had been used to service the loan. However, it declined to order Kabushenga personally to refund the repayments, ruling that the plaintiffs had not proved that the money had been diverted to his personal project without institutional authorisation.
Justice Mugenyi noted that Great Lakes Regional College Ltd, which borrowed the money and owned the Busiro property, was not a party to the case.
She also observed that board resolutions showed that the institutions had approved arrangements connected to the AGE project and the loan.
The judge said the evidence did not establish, payment by payment, which loan repayments had come from funds belonging to Great Lakes Regional University Ltd and CHIFCOD Social Enterprise Ltd, and which had come from other institutional revenue or land sale proceeds.
She concluded that a claim to recover the money paid towards the loan could properly be pursued against Great Lakes Regional College Ltd. She added that the judgment did not bar the two institutions from pursuing that claim.
The court also rejected the donors’ claim that their financial contributions made them constructive co-owners of property acquired or developed by the institutions.
Justice Mugenyi ruled that the donors had provided money to support the institutions but had not retained a beneficial ownership interest in the resulting property.
She further noted that Great Lakes Regional College Ltd, the registered proprietor of the land in question, was not a party to the proceedings and that its property rights could not be determined without giving it an opportunity to be heard.
The certificates of title deposited in court will remain in the custody of the court registrar until a further order is made following a formal application involving the relevant parties and the registered proprietor.
The judge awarded costs to Great Lakes Regional University Ltd and CHIFCOD Social Enterprise Ltd, which had partly succeeded in their claims.
She declined to award costs to the three donor organisations despite dismissing their claims, citing Kabushenga’s failure to account for the money as a factor that had prompted the litigation.