Court rules URA unlawfully fired Theron Music founder David Kalemera

Uganda’s Industrial Court has ruled that the Uganda Revenue Authority (URA) unlawfully dismissed former customs officer David Kalemera, even though the judgment details a major internal audit that linked him to a tax-evasion and transit-diversion scheme.

The court awarded him about Shs51 million.

Kalemera, who founded Theron Music, the label that once managed Kataleya and Kandle before their 2024 fallout, was fired in 2017.

Justice Anthony Wabwire Musana said URA had reason to suspect serious misconduct but failed to follow its own Human Resource Manual and denied him a fair hearing.

He noted that dismissal must be fair in both procedure and substance.

“While the dismissal was substantively justified, it was procedurally unfair and unlawful,” he wrote.

In 2024, President Museveni appointed Kalemera to the State House Revenue Intelligence and Strategic Operations Unit to help monitor URA operations and curb corruption, a move that sparked online backlash because of his past record.

A year later, he was quietly moved to the Ministry of Foreign Affairs.

The ruling reveals a long-running URA probe into a transit-diversion ring involving foreign traders, clearing agents and insiders in customs.

The case involved fabric marked for re-export to the Democratic Republic of Congo but diverted to Sunbelt Textiles Co. Ltd in Jinja, costing government about Shs518 million in lost taxes.

URA’s Internal Audit and Compliance Directorate reported that the operation was well coordinated and that individuals linked to the cargo had suspicious dealings with Kalemera.

A key focus was the movement of funds through his personal Bank of Africa account.

By May 2016, the account had received Shs4.285 billion in deposits, a figure the court said did not match the salary or lifestyle of a revenue officer.

The deposits included Shs963.9 million from Chinese traders tied to the consignment, Shs1.432 billion from clearing agent Julius Golooba, and several large transfers from Chinese trader Wang Lei. Investigators said the timing of Wang’s deposits matched the arrival, diversion and attempted clearance of the goods.

The audit also flagged frequent phone communication between Kalemera, Wang, Golooba and others during the movement of the consignment from the DRC route to Jinja.

Call logs aligned with key customs actions and bank transactions. URA concluded that Kalemera was effectively working as “a de facto clearing agent,” which breached conflict-of-interest rules.

Kalemera received the Offence Notification Form on March 17, 2017, the same day he appeared before the disciplinary committee.

URA rules give employees at least five working days to prepare. URA also did not share investigation reports, witness statements or evidence.

No witnesses appeared for cross-examination, and committee minutes were described as skeletal, with no proof of how the evidence was assessed.

The judge said giving Kalemera less than a day to respond to serious allegations made the process unfair.

His lawyers argued that his earlier acquittal in the Anti-Corruption Court cleared him, but the Industrial Court said criminal outcomes do not determine employment matters. It stressed that an employer can act on a “managerial belief” based on a balance of probabilities.

URA must now pay him Shs3.49 million (four weeks’ net pay), Shs6.98 million in general damages, and Shs40.57 million as a service award. The court rejected claims for severance, gratuity, aggravated and punitive damages, saying full compensation was not possible where strong evidence of misconduct existed.