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Q&A – 21 November 2016

Listing on the Dar stock market

I have started a company in Tanzania and am thinking of going public and registering it with the Dar es Salaam Stock Exchange (DSE) so that I can raise more capital and expand the business. Can a smaller company be registered at DSE? Or is fit or the big companies only? Is this the right time to go public?
IT, Dar

The DSE is not for big companies only. There are legal conditions and requirements provided under the law for companies to be allowed to offer shares to the public. However based on the details you have provided in your question, your company might fall under a segment known as the Enterprise Growth Market (EGM) which is a market segment introduced to facilitate mobilization of capital by companies which do not meet the eligibility criteria for listing on the main investment market segment. The main Investment market segment requires amongst others the company to have been operational for at least three years with a profitability track record two of the last three years before application and It must have at least TZS 200 million paid up capital.

As for the EGM it is designed to help startup companies, such as yours, with good business plans but lacking capital. The requirements for EGM therefore do not require for any minimum capital requirement, no minimum track record, and no minimum profitability requirement. However prior to going public you must have a 5 year business plan, an independent technical feasibility report prepared by a nominated advisor and prepare a prospectus to be approved by the Capital Markets and Securities Authority. The company will have to comply with the Capital Markets and Securities Act and the listing rules of the DSE.

As for timing, our opinion is that the timing might not be the best at the moment as before 31 December 2016, all of the large mobile operators are mandatorily required to sell 25% shares to the public and list on the DSE. We estimate shares of over 1 billion US dollars of these telecom operators will soon be coming in the market and with the current market liquidity it is doubtful if even these large companies will succeed in their IPOs. There are chances that this IPO might be postponed but overall you need to seek the services of an investment advisor to guide you on the timing.

Remand imprisonment dress code

My relative against whom charges have been trumped up is sitting in remand prison awaiting his bail application to be heard. I fail to understand how he can be treated like others who have been convicted? Does the law not distinguish between those who are convicted and those who are yet to have their case heard? Can we not take food and clothes for him?
JH, Morogoro

We agree with your observation as does the law.

Section 76 of our Prisons Act provides for this in that (1) An unconvicted prisoner may be permitted to maintain him- self and to purchase or receive from private sources at proper hours, food, bedding, clothing or other necessaries, but subject to examination and to such other conditions as the Commissioner may direct. (2) No food, bedding, clothing or other necessaries belonging to an unconvicted Prisoner shall be given, hired, loaned or sold to any other prisoner; and any prisoner contravening the provisions ofthis section shallbe liable to lose the privilege of purchasing or receiving food, clothing or other necessaries from private sources for such time as the officer-in-charge may think proper. (3) If a civil or unconvicted. Prisoner is unable to receive clothing, bedding or food supplies, or if such food is in the opinion ofthe officer- in-charge unsatisfactory such prisoner shall receive the, regular prison diet, clothing and bedding. (4) No civil or unconvicted Prisoner shall be given or be compelled to wear prison clothing unless- (a) the prisoner’s dress is insufficient or improper or is in an un- sanitary condition; or (b) the prisoner’s dress is required as an exhibit; and (c) he is unable to Procure other suitable clothing from any other source. (5) Any debtor may in addition to the supply of bedding be issued with a bedstead or be permitted to Supply himself with a bedstead. Based on the above you can see that unconvicted prisoners are to be given a different treatment compared to convicted prisoners.

Motive in criminal law

How important is motive in the commission of a criminal offence? Can I be committed to jail even if I did not have a motive to commit a criminal act?
OP, Dar

A motive, in law, especially criminal law, is the cause that moves people to induce a certain action. Motive, in itself, is not an element of any given crime; however, the legal system typically allows motive to be proven in order to make plausible the accused’s reasons for committing a crime, at least when those motives may be obscure or hard to identify with. However, a motive is not required to reach a verdict. Motives are also used in other aspects of a specific case, for instance, when police are initially investigating.

The law technically distinguishes between motive and intent. ‘Intent’ in criminal law is simply explained synonymous with Mens rea, which means the mental state shows liability which is enforced by law as an element of a crime. ‘Motive’ describes instead the reasons in the accused’s background and station in life that are supposed to have induced the crime.

Further our main law that governs criminal matters, the Penal Code, states in section 10 that unless otherwise expressly declared, the motive by which a person is induced to-do or omit to do an act, or to form an intention, is immaterial so far as regards criminal responsibility. Hence not having a motive does not mean that you will be let free.