UGANDA Law and Practice Contributed by: Arnold Lule Sekiwano, Ritah Nakalema, Evelyn Maria Nakigudde and Collette Melvina Awano, Engoru, Mutebi Advocates
ket Segment must disclose any changes in the own - ership percentage of major shareholders during the same period. 4.3 Hurdles to Stakebuilding Stakebuilding is not common in Uganda, and there - fore we are not in a position to contemplate any hur - dles to stakebuilding. 4.4 Dealings in Derivatives There are no restrictions imposed on transactions involving derivatives. Derivatives are also known as secondary securities whose value is solely based on the value of the primary security that they are linked to, called the underlying. Typically, derivatives are con - sidered advanced investing. Unlike in similar jurisdic - tions, where derivatives are often traded on exchang - es, there is no dedicated derivatives exchange in the country. Consequently, derivatives transactions occur over the counter (OTC). However, investors need to be aware of the risks with OTC markets since the transactions do not have a central marketplace nor the same level of regulatory oversight as those trans - There are no filing and/or reporting obligations for derivatives under securities disclosure and competi - tion law. 4.6 Transparency In private companies, there are no rules or regula - tions on what information must be made available to a buyer. Usually, information is made available to a potential buyer during the due diligence process. On the other hand, in listed companies, the Takeo - vers and Mergers Regulations obligate the acquirer to disclose in the offer document all such informa - tion as the target and its shareholders would require. The disclosure shall state: the identity of the ultimate bidder; names of the directors and shareholders and the extent of their interest in the bidder; long-term commercial justifications for the proposed takeover offer; and intentions regarding the continuation of the business of the target. The Takeovers and Mergers Regulations provide for offences and penalties in the event that the informa - actions done via regulated exchanges. 4.5 Filing/Reporting Obligations
tion disclosed is false or misleading. There is also a provision for a purchaser that discovers that informa - tion disclosed was false or misleading or contained a material omission to disclose the fact to the CMA and issue a press notice rectifying the false or misleading information.
5. Negotiation Phase 5.1 Requirement to Disclose a Deal
In private companies, there are no requirements to disclose a deal. As such, M&A transactions in private companies tend to be confidential. For listed companies, the Takeovers and Mergers Regulations stipulate that a purchaser that intends or proposes to acquire effective control in a listed com - pany shall make a public announcement through a press notice and serve a notice of intention of the scheme on the target within 24 hours of making a decision to acquire effective control in a company or from the passing of a resolution of its board approving the transfer. The notice of intention must also be offi - cially served on the target company at its registered office. Furthermore, copies of this notice must be simultane - ously delivered to the CMA and the USE. It is impera - tive to note that where there has been a press notice of an intention to make a takeover offer, the bidder is prohibited from withdrawing the takeover offer without the prior written consent of the CMA. There is no specific stage at which a target is required to disclose a deal. 5.2 Market Practice on Timing Market practice on timing of disclosure does not differ from legal requirements. 5.3 Scope of Due Diligence In Uganda, due diligence exercises will usually cover legal, commercial, financial and tax issues. The scope of the due diligence exercise will differ from one trans - action to the other and could also depend on whether the transaction is structured as a share or asset deal.
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