MTN Uganda Ordered to Pay Shs 2.3 Billion for Malicious Prosecution of Former Manager

MTN Uganda Limited faces a hefty Shs 2.3 billion penalty after the High Court ruled that the telecommunications giant maliciously prosecuted its former senior manager, Richard Mwami. Mwami, who previously managed MTN’s Village Phone and Public Access departments, was among those charged in a significant mobile money fraud case involving approximately Shs 16 billion.

Court documents reveal that Mwami was the one who initially detected suspicious activities on MTN’s mobile money platform in December 2011 and promptly reported it to management. This led to an independent forensic audit by Grant Thornton, which ultimately exonerated Mwami from any involvement in the fraud.

Despite these findings, MTN proceeded to implicate Mwami, reportedly relying on a statement from another suspect that was later deemed inadmissible by the Anti-Corruption Court due to findings that it was obtained involuntarily. Justice Bonny Isaac Teko found that MTN employees were involved in the procurement of this statement and that the company failed to present evidence to counter this link.

Mwami was eventually acquitted in December 2015, with the court describing him as a “sacrificial lamb” and suggesting he should have been a witness. He subsequently sued MTN for malicious prosecution. The High Court determined that MTN relentlessly pursued Mwami’s prosecution, disregarding the exculpatory audit report and relying solely on a confession later declared invalid.

Justice Teko stated that MTN lacked a reasonable basis to initiate criminal proceedings and acted with malice. The court noted that Mwami, who had acted as a whistleblower, was arrested over a year after investigations concluded and after others were already facing charges. The court also highlighted the improper use of a violent crimes unit for his arrest, despite a lack of direct evidence linking him to the fraud.

The court accepted that the prosecution had a detrimental impact on Mwami’s career, leading to termination from another role and public reputational damage. He was awarded 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 and legal costs. The judge emphasized the necessity of exemplary damages to deter corporate entities from abusing the justice system.

MTN Uganda had denied liability, claiming the prosecution decisions were made independently by the police and DPP. However, the High Court concluded that MTN’s actions were pivotal in initiating the proceedings, holding the company fully accountable.

Source: https://observer.ug/news/mtn-ordered-to-pay-shs-2-3bn-to-former-manager-over-malicious-prosecution