Court Orders MTN to pay Shs 2.3bn to former manager over malicious prosecution

Mwami, who served as senior manager for MTN Village Phone before becoming senior manager for Public Access, was among several people charged following the theft of about Shs 16 billion from MTN’s Fundamo mobile money platform.

Court heard that in December 2011, Mwami detected suspicious transactions on the platform and promptly alerted senior management, triggering investigations into the fraud.

MTN subsequently commissioned Grant Thornton to conduct a forensic audit, which cleared Mwami of any involvement in the theft.

Despite the findings, the company relied on a charge and caution statement allegedly made by one of the suspects, Patrick Ssentongo, to implicate Mwami, leading to his arrest and prosecution.

The statement was later rejected by the Anti-Corruption court after Justice Lawrence Gidudu ruled that it had been obtained involuntarily and through unlawful means.

In his judgment, justice Bonny Isaac Teko found that MTN employees were directly involved in the circumstances under which the statement was procured and that the company failed to rebut evidence linking its officials to the process.

Mwami was acquitted in December 2015 after the trial court found no evidence connecting him to the offences and described him as a “sacrificial lamb” who should have been a prosecution witness rather than an accused person.

He subsequently sued MTN Uganda for malicious prosecution. In the latest judgment, Teko held that MTN was the driving force behind Mwami’s prosecution despite possessing a forensic audit report that had exonerated him.

The judge found that the company lacked reasonable and probable cause to initiate criminal proceedings because it disregarded the forensic findings and instead relied solely on a confession that was later declared inadmissible.

The court further held that MTN acted with malice by using the criminal justice system for an improper purpose. Justice Teko observed that Mwami, who had exposed the fraud as a whistleblower, was arrested more than a year after investigations had been completed and after criminal proceedings had already commenced against other suspects.

The judge also noted that Mwami was arrested by the Violent Crimes Crack Unit, a police unit ordinarily associated with serious violent offences, despite there being no evidence linking him to the fraud.

The court accepted Mwami’s evidence that the prosecution destroyed his professional career after the Bank of Uganda classified him as a reputational risk, leading to the termination of his employment with Mobile Money Africa Limited.Ugandan news updates

Justice Teko further noted that Mwami spent seven days on remand at Luzira Prison, remained on restrictive bail conditions for more than two years, and suffered significant reputational damage after being publicly linked to the fraud allegations.

The court awarded him Shs 1.809 billion in special damages, Shs 400 million in general damages and Shs 100 million in exemplary damages. MTN Uganda was also ordered to pay interest at 10 per cent per annum from the date of judgment until full payment, in addition to the costs of the suit.

In assessing damages, the court upheld Mwami’s claims for lost salary, housing allowance and medical benefits arising from the loss of his employment. However, it rejected claims relating to the value of a company vehicle, performance bonuses and legal fees after finding they had not been sufficiently proved.

Justice Teko said an award of exemplary damages was necessary to deter powerful corporate entities from abusing the criminal justice system.

Throughout the proceedings, MTN Uganda denied liability, arguing that the decision to charge Mwami had been made independently by the Uganda Police Force and the Directorate of Public Prosecutions.

The High court, however, concluded that MTN’s actions were instrumental in setting the prosecution in motion and held the company liable for malicious prosecution.