A deepening financial and legal crisis surrounding the owner of Emin Pasha Hotel has taken a more complex turn, as allegations of a forged presidential directive emerge, further entangling an already fragile dispute involving government arrears, court orders, and a mounting UGX 34 billion debt to Equity Bank.
At the heart of the matter is Prism Construction and its proprietor, Kennedy Erestus Lokule Losuk, whose long-running standoff with government over unpaid claims has now collided with questions about the authenticity of key presidential communications that previously underpinned his case.
The directive under question
Following CEO East Africa Magazine’s story detailing the deepening crisis engulfing Prism Construction and Emin Pasha Hotel owner last week, Ministry of Finance sources familiar with the matter, who asked not to be named to speak freely, said the Ministry had been alerted to a suspected forgery involving a presidential directive, which is being investigated by the Office of the Attorney General.
Sources indicate that there are two presidential directives related to Lokule’s payments, one of which is now suspected to have been forged.
The existence of the questionable directive introduces a new uncertainty into an already delicate process involving verification of government obligations and enforcement of loan securities.
Efforts to independently confirm the status of the investigation were unsuccessful by press time, as calls and messages to Attorney General Kiryowa Kiwanuka went unanswered.
Lokule himself could not be reached. However, individuals familiar with the matter suggest that he could be aware of the ongoing investigation because when he was confronted with the forgery claims, he appeared unsurprised, raising concerns about possible prior awareness.
Sources claim further that Lokule blames the Ministry of Finance, specifically Secretary to the Treasury Ramathan Ggoobi of frustrating payment efforts.
A dispute at the highest levels
The dispute is not new and has previously drawn attention at the highest levels of government. A State House meeting in December 2023, hosted by First Lady Janet Museveni, brought together senior government officials, including from the Office of the Attorney General to address Prism’s claims.
This was followed by a presidential directive dated May 27, 2024, instructing the Ministry of Finance and Bank of Uganda to ensure that Equity Bank does not dispose of Prism’s assets pending verification of the company’s claims.
Subsequent correspondence from the Attorney General in June and July 2024 confirmed that the matter had progressed through formal government channels.
However, the emergence of a suspected forged directive issued in August 2025 now complicates reliance on such instructions and could have affected how government is responding to the matter.
The directive allegedly instructed the Minister of Finance to settle all verified amounts due to Prism Construction.
Court battles and conditional relief
By 2025, the dispute had escalated into the courts after Equity Bank moved to enforce its securities over properties linked to Emin Pasha Hotel and its affiliates, citing outstanding loans exceeding UGX 34 billion.
In a ruling delivered on August 9, 2025, the High Court Commercial Division granted temporary relief by extending an injunction against the sale of the mortgaged properties, but imposed strict conditions.
Justice Patricia Mutesi upheld the principle of “pay now, argue later,” requiring the borrowers to deposit 30% of the outstanding loan, approximately UGX 9.7 billion, as security, failure of which would automatically lift the injunction.
The court also relied on existing property valuations and lender-stated loan balances, reinforcing the bank’s position in the recovery process.
Mounting auction pressure
Despite the temporary relief, pressure from the lender has continued to mount. Properties including Emin Pasha Hotel in Nakasero, another property on Akii Bua Road, and land in Kisugu have been listed for sale as part of the recovery process.
Equity, sources indicate, is moving ahead with plans to sell mortgaged properties as payment deadlines elapse with no clear direction in the recovery of an outstanding loan balance of UGX 34 billion.
Court-appointed bailiffs have repeatedly signaled readiness to proceed with auctions unless court-imposed conditions are met.
Government payments still unresolved
Central to Prism’s defense is its claim that government owes it substantial sums. The company states that it submitted claims worth UGX 26 billion for arbitration or settlement, with a harmonised report completed in May 2024.
From this, a specific claim of UGX 2.39 billion was formally filed with the Attorney General in October 2025. Of this amount, UGX 1.28 billion has been verified as payable, while UGX 1.11 billion remains under review.
However, in a March 26 letter to the Attorney General, Prism indicated that even the verified sums had not been paid, despite presidential directives and court orders, including an Order of Mandamus issued in October 2025 compelling government to settle at least UGX 5.8 billion.
Partial payments were made under a consent arrangement involving government, Equity Bank, and Prism, but subsequent installments were missed, even after extended deadlines into March 2026.
A key investment under threat
With things stalling due to an alleged investigation into the authenticity of a presidential directive, the financial strain is now spilling over into broader investment plans, particularly the Radisson Emin Pasha Lakeview Hotel project.
Prism says it has invested about $20 million (approximately UGX 71 billion) into the development.
While the project is not directly listed among the charged securities, ongoing lender pressure and cash flow constraints have placed it at serious risk.
Lokule, in his letter, describes the project as a major tourism investment tied to a global brand, but warns that its disruption could harm Uganda’s tourism growth and investor confidence.
A more complicated crisis
The introduction of a suspected forged presidential directive has added a new layer of complexity to an already protracted dispute.
What was previously framed as a straightforward conflict over unpaid government obligations has now evolved into a multifaceted crisis involving legal uncertainty, financial distress, and questions of administrative integrity.
As deadlines continue to lapse and enforcement actions mount, the fate of Emin Pasha Hotel and its associated investments remains uncertain, caught between unresolved government commitments, judicial conditions, and a lender determined to recover its dues.
