The Uganda Securities Exchange (USE) has extended the suspension of trading in UMEME Limited shares by 30 days, following a formal declaration of a dispute between the company and the Government of Uganda over the final buy-out amount as UMEME’s concession nears its end.
The decision, announced in a public notice by USE, comes after UMEME served a Notice of Dispute to the Ministry of Finance, Planning and Economic Development on April 11, 2025, citing unresolved issues related to the buy-out compensation agreed upon under the terms of its Concession Agreement.
The initial suspension, imposed on March 31, 2025, was meant to last two weeks. However, following the dispute notice, the USE has now moved to extend the suspension to May 14, 2025, to allow both parties to pursue a “good faith” settlement, in accordance with the concession’s dispute resolution framework.
USE Chief Executive Officer Paul Bwiso emphasized that the action is intended to safeguard market fairness and investor interests.
“Material information was being circulated unofficially before formal disclosure, which could distort share prices and mislead investors,” he said. “The 30-day extension gives room for clarity, formal communication, and compliance with disclosure rules.”
According to the company’s statement, if a settlement is not reached within the prescribed period or any mutually agreed extension, the matter will proceed to arbitration in London as stipulated under the agreement clauses 9.1 and 9.2.
UMEME’s Concession Ends, But Listing Remains Active
UMEME Limited, Uganda’s primary electricity distributor for over a decade, remains a listed entity on the USE despite the expiration of its operational concession.
Capital Markets Authority (CMA) Chief Executive Officer Mrs Josephine Okui Ossiya, speaking during the joint press briefing with USE, clarified the status.
“UMEME’s concession may have ended, but it remains a listed company subject to all continuous disclosure obligations,” she stated. “We expect the company to submit progress reports and update the market on any decisions or actions taken.”
As required under Rule 4 of the USE Listing Rules 2025, UMEME must comply with listing requirements throughout the suspension and keep shareholders informed.
CMA and USE Strengthen Oversight and Market Reforms
The dispute and trading suspension come at a time of broader reforms aimed at increasing transparency and regulatory effectiveness in Uganda’s capital markets. Both CMA and USE have stepped up efforts to protect investors, foster market stability, and promote timely public disclosure.
“We are working closely with the Exchange to ensure compliance with disclosure regulations and improve real-time communication,” Bwiso said. He added that USE is reviewing communication channels, including social media alerts, to ensure the market is informed promptly and accurately.
As part of these reforms, CMA has initiated licensing of securities dealers, with Standard Chartered Bank Uganda becoming the first bank to obtain a dealer license under the revised regulatory framework. The move aims to broaden access to capital markets and deepen liquidity, particularly in the fixed-income space.
“We encourage all banks and non-bank financial institutions to seek licensing,” said Mrs. Ossiya. “This step enhances trust, enforces accountability, and supports the long-term development of the market.”
Investor Advisory and Next Steps
UMEME’s board, through its legal representatives Shonubi, Musoke & Co. Advocates, has advised the public and investors to exercise caution and seek professional advice concerning the company’s shares during this period of uncertainty.
The announcement was made in line with Rule 36 and 38 of the USE Listing Rules, 2025, and Kenya’s Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023.