Friday, March 29, 2024

MTN share offer raises dust, CEO summoned by LuSE

Share

mtn

Mobile phone operator MTN Zambia’s planned listing of its 11.9 percent shares through Ikulileni Investment Plc is now a subject of an internal investigation by the Lusaka Stock Exchange after questions were raised over the suspicious manner in which the transaction has been handled.

Early this month, Ikulileni Investment Plc which owns 11.9 percent of MTN Zambia announced that it has offered 27,061, 057 shares of par value K0.01 and offer price K26.50 on the LuSE.

Ikulileni Investment Plc valued the company at as much as $97 million and the offer opened on Monday 4th May and will close on Friday 29th May 2015 with Tuesday 16th June 2015 set as the listing date.

The decision by MTN to list on the LuSE is aimed at fulfilling a licencing requirement by ZICTA which has compelled all foreign owned mobile phone companies to at least offer 12 percent shares for public ownership.

But information has emerged that Ikulileni Investment Plc is infact owned by people close to MTN Zambia including Board Chairman Valentine Chitalu and Chief Executive Officer Abdul Ismail.

According to records at PACRA, other shareholders in Ikulileni are former Stanbic Bank Zambia Managing Director Larry Kalala, FSG Zambia Chairman Padmore Muleya and Diamond Insurance Chairman Arthur Ndhlovu.

PACRA records further shows that another local company called CCM Telecoms owned by Mr Chitalu and Superior Milling Chairman Caleb Mulenga owns Ikulileni Investments.

Others are Corpus Globe and Munyati Buffalo Zambia.

The entire transaction is believed to have been structured by Lusaka lawyer Lewis Mosho of Lewis Nathan Associates who is at the centre of the Shoprite shares saga which is now in court.

Mr Mosho who was last year investigated by the Drug Enforcement Commission for allegedly selling 2,220,897 Shoprite shares worth US$10million on the LuSE without the company’s authority or consent from the year 2005- 2011 was paid in the region of K200, 000 as transaction adviser and book runner.

But another Lusaka lawyer Mulenga Fube has written to MTN demanding that the share offer be halted as it lacks transparency.

In a letter copied to LuSE and the Securities Exchange Commission, Mr Fube said the listing is fictitious and suspicious and against the spirit of empowering local people.

He has since warned that he would seek an injunction from the Lusaka High Court to halt the listing.

Meanwhile, insiders at LuSE have revealed that MTN Zambia CEO Abdul Ismail has been summoned by management at LuSE to explain the relationship between MTN and Ikulileni on Thursday, May 28 2015 at 10 Hours.

Sources at LuSE say management is under pressure from the Board to explain how it approved the transaction which they feel is dubious.

Many industry experts have been wondering why MTN used a special investment vehicle called Ikulileni which was only registered in October 2014 to list the shares when its rival Airtel went to the LuSE directly.

Some feel that the Directors at MTN want to use Ikulileni to raise additional funds and pay their own huge bonuses and bar minority shareholder from having direct access to MTN.

This would evidently mean that Zambian shareholders in Ikulileni who will be duped into believing they own shares in MTN will have no say on the running of the telecoms giant as they will only be made to deal with Ikulileni.

MTN Zambia is now the country’s largest telecoms company with 51.4 percent share of the mobile telecommunications market with over 5 million subscribers as at end of December 2014.

12 COMMENTS

  1. You can only deal with Lewis Mosho at your own risk.He runs Luse through his former classmate Priscilla the company secretary and legal counsel.The whole Luse should just be reorganised.

  2. The Ikulileni (I hate South African Zulu names!) saga is only possible because the sponsors also control MTN. Valentine and his cohorts are empowering and enriching themselves. However, ZICTA must be asleep at the wheel for them to agree that the hiving off of a small MTN stake into a private company is the same as MTN listing. It is not.

    • Actually Ikulilen is a Bemba word meaning build yourselves. Luse has always been dirty and it’s high time it was properly checkef for it’s dubious activities and so is the MTN!

    • @Buck Teeth Lungu you are always giving us wrong information! You will do well to check your facts before you put them in to print!

    • You hate yourself, really! Ikulileni is bemba meaning ‘build your own’!
      VC at it again! Him he specializes in sharelology from the time he looted ZPA!
      Viva Luse! You know what to do, Abash thieves!!

  3. Ba LuSE why not halt the IPO till further notice? You do not want prospective minority investors to end up waiting for refunds that take forever to be effected!

  4. Restructure the players and put them in their right place as they structure advise and trade on securities not only equities

    Let regulatory structure, ethics and trading as it relates to players in dealers,brokers,investments houses be clearly defined, filling arrangement, trading restrictions, disclosures and others clearly defined

    Its only in Zambia where lawyers are seen as active players in securities from a to z clearly bringing agency problems,fairness,fraud control and sustainability

    Lawyers alone donot constitute market trading and settlement and in most cases occupy a custodial role and not market participation

    Clearly this MTN is flawed and must be a point of thought

  5. Want to invest my pension on Luse but then the little matter of one Ben Madoff keeps niggling at my brain. If BM was able to operate fraudulently on the US SEC. for such a long time without detection, what if an adulterated version of BM (maybe called Lewis or Nathan or such a name) appeared on our SEC., will they ever catch him. Just musing. Maybe I will just invest in bu kachema.

  6. Its very easy to analyse trades and securities in structure and settlement in Zambia Its very easy and this Nathan is like belvedere in Cape Town in similar and Housed at The same security and exchange commission near parliament and yet they go on as usual

    Its not all members but work on the structure of these markets, players and update the ethics and standards implied in the securities act of yester year and support people at Luse and Sec who are working under severe pressure honestly to ensure a fair exchange and that lives to the most ethical environment

    lawyers must be reverted to there right place in issues of securities and settlement and custody

    its long over…

Comments are closed.

Read more

Local News

Discover more from Lusaka Times-Zambia's Leading Online News Site - LusakaTimes.com

Subscribe now to keep reading and get access to the full archive.

Continue reading