October 20, 2023
KAMPALA, Uganda | David Balondemu, the Chairperson of the Kampala District Land Board, has been remanded to Luzira prison on charges of obtaining money from a Korean investor by false pretense. Balondemu, 52, appeared before City Hall Chief Magistrate’s Court, presided over by Mr. Edgar Karakire, after his arrest by officials from the State House Anti-Corruption Unit and the police.
The state alleges that Balondemu, along with others, defrauded Mr. Hyun Uk Kim of $600,000 (approximately Shs2.2 billion) in a 53kg gold scam. His remand extends until November 6, 2023, following unsuccessful attempts by his three lawyers to secure bail. Both parties presented lengthy submissions which prompted the presiding Magistrate to adjourn the session insisting that he needed time to study the submissions and make an informed ruling.
The case unfolded after Mr. Kim, the alleged victim, complained to the president that he had lost a substantial amount of money to Kampala-based dealers. Prosecution, led by Ms. Mercy Yamangusho Khaidarah, has also asked the court to issue a warrant of arrest against Geoffrey Eric Mkwe, another lawyer, to appear in court on similar charges.
This development comes shortly after two of Balondemu’s co-accused, James Jeff Mugisha and Godfrey Maviri, both self-employed, were remanded to prison on October 4, 2023, for their alleged involvement in the offense, which was purportedly committed in 2021. Their remand period is until November 25, 2023.
According to the charge sheet, Balondemu, Mkwe, Mugisha, Maviri, and others at large allegedly conspired between March and November 2021 at the offices of M/S Balondemu & Co. Advocates along Parliamentary Avenue in Kampala City. They are accused of obtaining $600,000 from Kim, claiming to be selling him gold, which they allegedly did not possess.
Court documents reveal that Mr. Kim was initially contacted by Mugisha, who had knowledge of the alleged gold seller. Mr. Kim was put in touch with the seller’s alleged son and interpreter, who picked him up from the airport. Subsequently, a Memorandum of Understanding was signed, requiring Mr. Kim to pay a deposit of $208,000 (approximately Shs700 million). He handed over the cash to the law firm.
However, the situation took a different turn when, instead of the gold being transported as requested by Mr. Kim, he was asked to pay an additional $62,000 (over Shs200 million) for Cargo Flight Insurance. During these transactions at the law firm, it was discovered that Maviri was in the company of the gold seller, and a search of his home led to the recovery of six kilograms of suspected gold nuggets.
The accused parties purportedly met at Imperial Residence Apartment, where Mr. Kim was shown gold nuggets, and later, they visited M/S NSB Advocates and Legal Consultants to finalize the deal.
As the court proceedings continue, the case has raised concerns about fraudulent practices in the gold trade and the importance of thorough due diligence, which investors must exercise when engaging in such high-value transactions.
