Prime
Uchumi lands in trouble with Uganda regulator
Uchumi supermarket has been accused of violating rules. PHOTO | FILE
Uchumi Supermarkets has come under the radar of the Uganda Securities Exchange (USE) for non-compliance with listing obligations.
USE has reached out to the Nairobi Securities Exchange and Capital Markets Authority to force the struggling retailer to adhere to public disclosure standards.
“We are in discussions with Nairobi Securities Exchange and the Kenya Capital Markets Authority,” Paul Bwiso, USE chief executive told The EastAfrican following suspension of trading of Uchumi shares on the Ugandan bourse.
Uchumi, cross-listed on the Uganda, Rwanda and Tanzania exchanges had its shares suspended from trading on the Ugandan bourse on July 19 through a public notice. USE said: “Uchumi failed to comply with listing obligations prescribed under the USE Fees, Charges and Penalties Rules of 2021 and the USE Listing Rules of 2021 respectively.”
Uganda is now banking on combined efforts of the Uganda and Kenya capital markets regulators to whip Uchumi into play by listing rules.
Continuous disclosure of information to the public is a mandatory for listed companies. “But Uchumi stopped reporting its financial results,” said Francis Gajja a trader at Equity Stockbrokers Uganda Ltd, saying the supermarket chain has had a rough time to sustain its business operations in a competitive East African retail space.
Uchumi’s financial woes worsened in 2015, after failing to pay suppliers forcing the company to opt for credit management initiative and to restructuring.
The retailer even asked for certain waivers and some time to restructure debt and stabilise the company, then revert to prudent reporting as required but it failed.
“We expected the company to take advantage of the 2020 Covid-19 lockdown to report back to us but did not,” said Mr Bwiso.
