By Aggrey Baba
MTN Uganda plans to move its mobile money business out of the listed company, a decision that has left many local shareholders uneasy and confused ahead of a crucial vote set for July 2.
The telecom giant says the move is part of a long-term strategy to separate its financial services from the traditional telecom business.
Many Ugandan investors fear they are being quietly pushed to the sidelines while the most profitable part of the company (mobile money) is taken far from their reach.
MTN wants to take MTN Mobile Money Uganda Ltd and shift it into a new private company called MTN New FinCo, which will not be listed on the Uganda Securities Exchange, meaning local shareholders will no longer own it directly, even though mobile money brought in UGX 958 billion in revenue in 2024 alone.
Instead, MTN is proposing to give investors what it calls an indirect stake, held through a Trust that will own over 23% of FinCo on their behalf, something which feels like being given a plate without being invited to the table, to many shareholders.
The telecom company says the restructuring is meant to comply with the National Payment Systems Act, which requires telecoms to keep their financial services under separate licenses and supervision from the Bank of Uganda.
MTN also argues that mobile money, as a financial technology product, needs to operate with more freedom to grow, attract new investors, and expand across markets.
Critics say MTN is using this legal requirement to reorganize itself in a way that benefits its parent company in South Africa more than the local Ugandan shareholders who joined the IPO in 2021.
Under the new setup, MTN Group will fully control the new FinCo, while Ugandans will own their small slice through a legal trust. Since FinCo will be a private company, it will no longer be answerable to the public or to the Uganda Securities Exchange.
What has especially raised eyebrows is the way dividends will now be handled. Currently, shareholders pay 10% tax on dividends because MTN Uganda is a listed company, but once FinCo takes over and starts paying dividends, the tax will jump to 15%, since it is a private company.
MTN has tried to calm fears by promising a Dividend Adjustment Mechanism to refund the extra 5% to local investors, a plan still awaiting approval from the Uganda Revenue Authority (URA), and many investors are not convinced.
Market analysts also note that the restructuring puts MTN Group in a stronger position to attract global partners and lenders while limiting how much say Ugandan investors have over what happens to mobile money.
As it stands, the July 2 Extraordinary General Meeting will decide the fate of the deal, but MTN has made it clear that if shareholders do not approve, the whole transaction could collapse.
However, behind closed doors, sources say the company is lobbying hard to make sure the vote goes through.
Some shareholders are still hopeful that the arrangement might bring long-term gains if FinCo performs well and the trust system works smoothly, while others are more cautious, warning that indirect ownership might weaken transparency, delay payments, and reduce accountability. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
