A group of shareholders in MTN Uganda Ltd has issued a stark warning over the company’s proposed restructuring of its mobile money business, citing concerns about transparency, potential liabilities, and the impact on shareholder value.
In a formal complaint lodged with Uganda’s Capital Markets Authority (CMA), the shareholders allege that MTN Uganda has failed to provide adequate disclosures about the risks and implications of the restructuring of MTN Mobile Money (U) Ltd.
Earlier this month, MTN Uganda Limited announced a significant restructuring plan for its mobile money subsidiary, MTN Mobile Money (U) Limited (MTN MoMo).
The proposed transaction detailed in a cautionary announcement issued in compliance with the Uganda Securities Exchange (USE) Listing Rules 2025 would see MTN MoMo cease to be a wholly owned subsidiary of MTN Uganda. Instead, the mobile money and fintech business would be operated by a newly amalgamated company.
The move has sparked fears among investors, with the shareholders urging regulators and fellow stakeholders to scrutinize the deal before approval.
MTN had advised shareholders and the public to exercise caution when trading its shares until further updates are provided. The company emphasized that the USE’s approval of the announcement does not imply endorsement of the transaction’s merits.
The shareholders, operating under the banner Reeve Advocates, outlined several critical issues in a Caveat Emptor (Buyer Beware) notice dated 27th June 2025. Their primary concerns include:
1. Potential Impact on Share Value
The shareholders argue that the restructuring could significantly devalue investments in MTN Uganda, particularly since the mobile money business a major revenue driver is currently fully owned by the telecom giant.
“Our view is that the transaction has a potential adverse effect on the security interests of the shareholders, for which MTN Uganda has not provided sufficient comfort,” the notice states.
2. Undisclosed Liabilities
Another major concern is the lack of clarity on potential liabilities that could arise from the restructuring. The MTN Uganda Shareholders claim that MTN Uganda has not provided a detailed report on existing, contingent, or future liabilities tied to MTN Mobile Money.
“One would expect that MTN Uganda would have issued a comprehensive report on liabilities and a settlement plan to regulators and shareholders,” the notice reads.
3. Lack of Transparency on New Ownership Structure
The MTN Uganda Shareholders also accuse the firm of failing to disclose crucial details about the new company’s ownership structure, including the identity of the trustees who will manage the shareholding trust.
4. Inadequate Communication
The notice criticizes MTN Uganda’s communication strategy, stating that it excludes MTN Uganda Shareholders who may lack technical expertise or have disabilities.
“MTN Uganda is obligated to take steps to facilitate complete comprehension among all shareholders, regardless of their technical background,” the shareholders argue.
The shareholders have called on the CMA and other regulators to thoroughly review the proposed transaction before granting approval. They also warned of possible legal action if their concerns are not addressed before the shareholder meeting.
“Should the directors not provide this information and allow shareholders to consider the matters with the detail they deserve, we will not hesitate to seek legal redress,” the notice states.
MTN Mobile Money is one of Uganda’s largest fintech platforms, handling billions in transactions annually. Any restructuring could have far-reaching implications for shareholders, customers, and Uganda’s broader financial ecosystem.
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