The Uganda Securities Exchange (USE) has suspended trading in Uchumi Supermarket shares, citing failure to observe listing obligations.
In a notice by the bourse, USE said trading in the Kenyan-based cross-listed company would remain suspended until it fulfils the requirements of a listed public company.
However, USE did not give details of specific obligations. Still, it highlighted continued failure to comply with the listing responsibilities such as publishing financial results, paying fees and penalties prescribed under USE Rules of 2021.
The problem of Uchumi has been its failure on disclosures of the company information and reporting obligations. 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,” Ms Salma N Katamba, the USE business development manager.
Uchumi was one of the first Kenyan companies to cross-list on the USE, listing on the USE on November 13, 2013, with 265,614 ordinary shares.
However, an ambitious expansion programme, weak management, and poor resource policy and unsuitable financing led to the collapse of Uchumi Supermarkets resulting in the closure of stores and devaluation of shares.
In 2015, the retail giant 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 values and spread.
Currently, the retail store operates only three stores in Kenya. In Uganda, Uchumi, which entered the country in 2020, had by the time of closure accumulated debts, exacerbated by an increase in losses.
While its shares have tried to remain stable with most of the trading taking place at the Nairobi Securities Exchange, the company has started to experience challenges resulting from loss-making and mismanagement.