NEW TWIST! Vine Pharmaceuticals boss sued over fraud

Vine Pharmaceuticals boss Grace Munyirwa

Vine Pharmaceuticals boss Grace Munyirwa

By Our reporter

The managing director of Vine Pharmaceuticals Ltd, Grace Munyirwa, has been sued over fraud and breach of contract allegations. Vine operates a chain of local pharmacies and cosmetic retail outlets spread all over Kampala.

Munyirwa and Vine Pharmaceuticals Ltd have been sued alongside Sheikh Kizza Muhamad and Juma Kamya Kasule—all as respondents.

According to court documents seen by this publication and filed in the high court of Uganda at Kampala (commercial division) HCCS 614/2021, the plaintiffs-Namugaya Catherine Muwuluke and Kagoya Margaret Racheal accuse Munyirwa and Co of backstabbing them after entering a deal to buy one of the Vine pharmacies situated in Wandegeya, Kampala.

The plaintiffs told court that on 18th December, 2019, Munyirwa resolved to sell the retail business of the Pharmacy located at rented premises situated on shop no. 01 Aisha Kasule Building, Plot 154 Bombo Road, Wandegeya, Kampala.

On 28th the same month, an agreement was entered into for sale to the plaintiffs of the retail Pharmacy branch business known as Vine Pharmaceuticals Limited together with all the undertakings, assets and interests including the stock and receivables in the business at the time of sale. The deal was to cost Shs285millions and this was paid in two instalments—Shs185, 000,000 was  duly paid by the plaintiffs  to Munyirwa and the balance of 100,000 ,000 was to be paid not later than  28th   March, 2020.

Court documents show this was an express provision under the agreement of sale that Munyirwa would immediately after execution of the agreement hand over the Wandegeya branch business of Vine Pharmaceuticals limited including the rented premises to the plaintiffs. Munyirwa further undertook to introduce the Plaintiffs to Sheikh Kizza Muhamad and Juma Kamya Kasule (the 3rd and 4th Defendants) who are the landlords.

U TURN

However, after  the  execution  of  the  sale  agreement,  the  plaintiffs  under a mistaken belief that Munyirwa would honour the agreement of sale, took over management of the pharmacy  including the responsibility  of paying for all the expenses of the business to wit the rent of the premises where the business was situated. That the plaintiffs as the new owners duly paid the rent for the year 2020.

That on 11th July, 2020, Munyirwa executed an agreement with the building owners stipulating that the tenancy on shop no. 01 on Aisha Kasule Building, Plot 154 Bomba Road, Wandegeya, Kampala would run until 31 December 2021 and that there would be no extension to the said tenancy. That he did this yet aware he was no longer in charge of the pharmacy since he had sold it already. That even when the plaintiffs continued running their business and as well paid rent upfront of Shs24million for 12 months (January to December 2022), the building owners refunded the money and stuck to their guns of terminating their tenancy come 31st December this year. “This refund was based on the illegal Agreement entered into by Munyirwa,” they state.

BREACH OF CONTRACT

The plaintiffs aver that Munyirwa did not honour his contractual obligation when he failed to formally introduce them to    the landlords per the sale agreement. Munyirwa is also accused of entering an agreement with the landlords regarding the said tenancy even after transferring ownership of the business at the premises. That he also failed to hand over quiet possession of the rented premises to the Plaintiffs.

“At trial, the Plaintiffs shall further aver, contend and show that the Defendants connived and engaged   in   fraudulent   transactions to   frustrate   /   impeach   the Plaintiffs’ tenancy on shop no. 01 on Aisha Kasule Building, Plot 154 Bomba Road, Wandegeya, Kampala.”

Vine Pharmaceuticals Wandegeya branch

FRAUD

That Munyirwa committed acts of fraud when he entered into an agreement with the landlords regarding the Plaintiffs’ tenancy even after sale of the business on the said premises and well knowing only the Plaintiffs had the authority to handle issues of management.

That he also withheld/concealed notices regarding the new owners and tenancy related agreements.

The landlords are accused of entering into an agreement with Munyirwa when they were well aware that the Plaintiffs were the tenants in occupation of the premises.

They also opine that the upfront rent which was refunded to the plaintiffs for January – December 2022 was not made in error. “The Plaintiffs shall contend that the fact that the payment    was made in cash to the 3rd Defendant and the purported error discovered nine months later is proof that the 3rd and 4th Defendants’ claims in this regard are mere afterthoughts.

That the connivance of the Defendants was calculated to cause economic / business loss to the Plaintiffs yet they are capable of paying rent.

“At trial, the Plaintiffs shall further aver that the individual actions of the 2nd Defendant (Munyirwa) in regard to the sale of the business amount to fraud and improper conduct…” the affidavit stresses.

PRAYERS

Plaintiffs want a court declaration that the 1st Defendant is in breach of the Agreement of the Sale of Retail Pharmacy Branch Business entered into with the Plaintiffs on 28 December 2019. A declaration that the actions of the Defendants in entering an agreement relating to the Plaintiffs’  tenancy  on shop no.01 on Aisha  Kasule Buildin,g   P l o t 15 4 Bombo Road, Wandegeya, Kampala without the Plaintiffs’ knowledge or authorization  were  fraudulent. They are also pushing for an order to lift the veil of incorporation of Vine Pharmaceuticals Ltd such that they can hold Munyirwa personally liable for his fraud perpetuated against the Plaintiffs.

They also want a permanent injunction restraining the landlords from evicting the Plaintiff’s from shop no. 01 on Aisha Kasule Building, Plot 154 Bombo Road, Wandegeya, Kampala.

WIDER PICTURE

This publication recently reported how one of the aggrieved partners had dragged Munyirwa to regulator-National Drug Authority (NDA) protesting the way he runs Vine Pharmaceuticals as a franchise business to an extent of comparing it to a Ponzi scheme. The grievances are captured in a letter dated 22nd November, 2022 and addressed to NDA executive director titled “RE: COMPLAINT AGAINST MR.GRACE MUNYIRWA AND VINE PHARMACEUTICALS LIMITED OVER PONZI SCHEME OF FRANCHISES AND EXPLOITATION.” The petitioner also wants Grace to refund her money and at the same time wants the NDA to probe Vine Pharmaceuticals’ modus operandi.

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