The Uganda Securities Exchange (USE) yesterday suspended trading in Uchumi Supermarket shares (USE:UCHM), citing failure to observe listing obligations.
In a notice yesterday, USE said trading in the Kenyan-based cross listed company would remain suspended until it fulfils requirements of a listed public company.
However, USE did not give details of specific obligations but highlighted continued failure to comply with the listing responsibilities such publishing financial results, paying fees and charges and penalties prescribed under USE Rules of 2021.
Ms Salma N Katamba, the USE business development manager, yesterday told Daily Monitor that the suspension had been necessitated to protect investors in the company as well as uphold transparency in equity markets.
“The problem of Uchumi has been its failure on disclosures of the company information and reporting obligations,” she said, noting that USE had through several notifications reached out to the supermarket on a number of issue, some of which have not been addressed over time.
“We have found it prudent to suspend Uchumi in the interest of transparency and protecting investors in the market because they have a right to know how the company is performing,” she said.
In 2015, Uchumi, which continues to face a number of challenges in Kenya, suspended operations in Uganda and Tanzania before halting a planned entry into the Rwanda market.
The supermarket, whose assets had grown to about $78.8m with shareholder equity standing at approximately $38.4m by June 2014, has fallen in both value and spread, operating only three stores in Kenya by December 2020.
In Uganda, Uchumi, which entered the country in 2020, had by the time of closure accumulated debts, exacerbated by an increase in losses.
Uchumi was one of the first Kenyan companies to cross list on the USE, listing on the USE on November 13, 2013 with a 265,614 ordinary shares.
While its shares had remained stable with most of the trading taking place at Nairobi Securities Exchange, the company started to experience challenges resulting from loss making and mismanagement.
The company’s counter, according to Ms Katamba, as of yesterday had a total allocation of 30,000 shares and nine shareholders.
Enforcement of measures and rules is a key factor in equity markets, on which stock exchanges build trust, enhance business growth and confidence.
Uchumi had by press time not responded to the suspension.
However, Ms Katamba said they would only act after Uchumi has complied with required USE listing rules.
Daily Monitor could not readily get a comment from Uchumi Supermarket by press time.
Mr Paul Bwiso, the USE chief executive, told Daily Monitor, yesterday that while they understand that there has been some actions with Uchumi settling its obligations with various stakeholders, the supermarket had not shared with USE any information in regard to the status of the company.
“They have not been sharing financial, annual and quarterly report with us here and investors despite notifications we have always sent to them,” he said.