Gold chase: An investigation into corruption and betrayal in Uganda’s mining sector

In a narrative marked by deception and despair, Christov Sergeyy, an American and former Tanzanian gold dealer, has seen his pursuit of wealth in Uganda’s mining sector devolve into financial ruin due to systemic corruption.

After losing Shs 2.2 billion in just one year, Sergeyy’s experience highlights a troubling trend of exploitation that undermines Uganda’s legal and regulatory frameworks.

THE ALLURE OF WEALTH: A RISKY INVESTMENT

Attracted by Uganda’s mineral resources, Sergey founded Igolide, a company intended to establish a gold processing plant. He invested Shs 40 million for land, spurred by promises of prosperity. Unfortunately, his optimism quickly faded as he became a victim of a sophisticated scheme involving influential individuals and two lawyers, Daniel Gatunga and Paul Wanyoto.

“Every week, I read about lawyers being tried for defrauding investors,” Sergey lamented.

“I thought I could trust them, but it turned out to be a gold curse.”

The fraud began when Sergey sought legal advice to navigate mining regulations. Instead of help, he encountered deception. After being cheated by a gold speculator, he consulted Gatunga, who recommended Wanyoto. Sergey alleges that Gatunga aimed to incorporate Igolide while allowing Wanyoto to pursue the fraud recovery.

Gatunga promised to expedite licensing through connections to military officials— connections that turned out to be non-existent. Although Igolide was incorporated, Sergey was never a signatory on the company’s account, as the lawyers claimed it was illegal for a foreigner to hold that position.

In a series of transactions, Sergey lost nearly Shs 2.2 billion, which was intended for mining operations and land purchases. When Sergey questioned suspicious trans- actions, the lawyers became evasive. They escalated the situation by accusing him of homosexuality, a serious allegation in Uganda that could lead to deportation, aimed at silencing him and concealing their fraudulent activities.

Sergey’s losses included: – Shs 40 million for land acquisition. – $ 50,000 as a “facilitation fee” for a gold exploration license. – $250,000 in a fraudulent gold transaction. – $367,000 misappropriated from Igolide Uganda’s bank account. These figures illustrate the vulnerabilities facing foreign investors in Uganda’s gold sector, where the promise of wealth often clashes with the harsh realities of corruption.

The flaws within Uganda’s judiciary, Law Society, and Law Council are glaring in Sergey’s case. Despite filing a lawsuit to reclaim his investments and seeking disciplinary action against the lawyers, progress has been agonizingly slow. The Law Council, responsible for overseeing legal professionals, has faced criticism for its inaction.

Complaints about Gatunga’s misconduct remain unanswered, allowing corruption to flourish. Sergey and his colleague, Emilian Manzi, filed a complaint against the lawyers for negligence on December 18, 2024, but the Law Council has been silent. Paul Wanyoto has leveraged his influence to obtain restraining orders against arrest, claiming whistleblower status in an unrelated case.

However, a letter from Kampala Metropolitan Police Headquarters (KMP) dated June 6, 2024, indicates no record of Wanyoto reporting any case against Sergey. This situation has left many investors feeling disillusioned with a system that appears to protect exploiters. Sergey’s plight has resonated with other investors facing similar challenges, igniting a movement for accountability in Uganda’s mining sector.

In response, he established a processing plant in Kisita, Mubende, collaborating with artisanal miners to promote sustainable gold processing practices.

“I don’t want other investors to go through what I’ve experienced,” he asserted. “The legal profession in Uganda is in dire need of reform.”

With the involvement of the State House Anti-Corruption Unit, hopes for accountability are beginning to materialize. A report detailing the fraudulent activities of Wanyoto and Gatunga is set for submission to the director of Public Prosecutions, though skepticism about the outcomes remains.

BROADER IMPLICATIONS FOR FOREIGN INVESTORS

Sergey’s story reflects the broader challenges facing foreign investors in Uganda’s mineral sector. Allegations against Wanyoto and his associates reveal a troubling pattern of lawyers exploiting their positions to defraud unsuspecting investors.

The lack of timely responses from the Uganda Law Society and Law Council raises critical concerns about regulatory accountability. As investors confront fears of legal malpractice and corruption, the future of Uganda’s mining sector remains uncertain. As the sun sets over Uganda’s mineral-rich lands, the fight for justice continues.

Sergey’s determination to hold corrupt lawyers accountable not only represents a personal battle but also serves as a call for integrity and reform in a sector plagued by deceit. With the State House Anti-Corruption Unit now involved, there is cautious hope for meaningful change.

In a country where trust in the legal system is waning, the resilience of investors like Sergey underscores the urgent need for reform. As they advocate for accountability, the path to a more transparent and equitable mining sector may finally be emerging from the shadows of corruption.