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Court dismisses petition against listing of MTN Uganda shares

MTN was become the first telecom firm to list on the Uganda Securities Exchange, a move that analysts believe could benefit the country's sluggish stock market.. (IMAGE: Courtesy | theKR Media)

MTN was become the first telecom firm to list on the Uganda Securities Exchange, a move that analysts believe could benefit the country’s sluggish stock market.. (UG Standard )

The Civil Division of the High Court has dismissed an application that was challenging the listing of MTN Uganda shares on the Uganda Securities Exchange.

The court petition filed by Male H. Mabirizi K. Kiwanuka on October 25, 2021 sought judicial review orders against the Capital Markets Authority (CMA)’s decision to approve the MTN Uganda prospectus, in respect to its Initial Public Offer (IPO) of 4,477,808,848 ordinary shares to the public.

But Justice Phillip Odoki on Friday November 26th 2021 dismissed the application, holding that it was highly irregular and its grounds were not stated or proved.

In reaching its decision, court examined the powers and duties of the CMA, whether the applicant had the locus standi (a basis in law) to file the application and any connection between the applicant and the respondent.

Samuel Sanya, the Communications and Public Relations Manager at CMA, welcomed the ruling.

In a statement issued on Monday, Sanya explained that CMA was established in 1996 by the CMA Act Cap 84.

“The Authority has several functions under this Act which include approval of prospectuses or offer documents; development of the capital markets; protection of investors, management of the investor compensation fund, among others,” he explained.

Sanya added that the Act was amended in 2011 to provide for issuance of securities to the public and ensure that CMA becomes a signatory to Appendix A of the International Organization of Securities Commission’s Multilateral Memorandum of Understanding.

“In May 2016, the H. E the President of the Republic of Uganda assented to the CMA Amendment Act 2016, and it took effect on 20 May 2016,” he explained.

Sanya said this amendment aimed to improve governance and operational aspects of the Authority and of those regulated under this Act. Section 101 of the CMA Act gives the Authority powers to develop Regulations which give effect to the Act.

“Granting licenses and approvals is one of the duties of the Authority as prescribed under Section 5 (2) (c & d). The Licensing and Approvals Regulations provide for what is required for entry into the market, what is required to remain compliant while conducting business in the capital markets, as well as the fines and penalties in case a player contravenes any of the provisions of the Act or its Regulations,” he said.

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