Concerns raised over special purpose vehicle created for MTN Zambia listing

Eyes have been raised over mobile operator MTN Zambia’s decision to list its shares on the Lusaka Stock Exchange using a special purpose vehicle called Ikulileni Investments Plc.

Prospective shareholders have raised concerns that allowing MTN to list through Ikulileni will be a breach of listing rules that stipulate a company needs a minimum of three years profitability history.

Ikulileni Investments Plc was only incorporated in October 2014 and, under the rules of listing on the Lusaka Stock Exchange, the company does not qualify.

There is also concern over potential conflict of interest because some MTN Zambia directors, including board chairman Valentine Chitalu, are also shareholders in and board members of Ikulileni.

Some commentators have suggested MTN is attempting to avoid scrutiny by minority shareholders who will invest in the operator if it lists directly as MTN Zambia.

Zambia’s minister of Communications and Transport, Yamfwa Mukanga, has said as far as he was concerned, there was nothing irregular about the share offer.