On 25th October 2021, an application was filed by Male H. Mabirizi K. Kiwanuka (the applicant) seeking judicial review orders against the Capital Markets Authority (CMA) 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 in the High Court of Uganda (Civil Division).
The application before Court was challenging the decision of the CMA to approve the MTN prospectus. The CMA was ably represented by the Attorney Generals Chambers.
The public is hereby informed that a ruling on the matter was delivered by Justice Phillip Odoki on Friday November 26th 2021.
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.
The application was dismissed with costs to the CMA.
The applicant proceeded after the ruling to request a temporary injunction to restrain the CMA from extending the MTN Initial Public Offer (IPO) window and from the eventual listing of the MTN shares on the stock exchange.
Prayers for the injunction were heard and disposed of.
The High Court dismissed the application, holding that it was highly irregular and its grounds were not stated
or proved.
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.
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.
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.
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