Controversy has erupted 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 which stipulate that a company needs a minimum of three years profitability history.

Ikulileni Investments Plc was only incorporated in October last year 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.

Others feel that MTN is trying to avoid scrutiny by minority shareholders who will invest in the operator if it lists directly as MTN Zambia.

Lawyer and a prospective shareholder in MTN Zambia Kelvin Fube is now threatening to take legal action if the planned listing strategy goes ahead.

Fube said, "the listing of Ikulileni should be halted as it is against the spirit of empowering Zambians".

He said a condition of the mobile operator's license is that Zambians have an opportunity to buy shares directly in MTN Zambia and not through Ikulileni Investment Plc.

However, the minister of Communications and Transport Yamfwa Mukanga has said as far as he was concerned, there was nothing irregular about the share offer and that he was one of the Zambians looking forward to buying shares in the company.

"As far as government is concerned, both MTN and Ikulileni have met the listing requirements as stipulated in the Securities and Exchange Commission Act," Mukanga said.

The process of listing is,however, subject to final regulatory approvals by all regulators in the country including the Lusaka Stock Exchange, Securities and Exchange Commission and Zambia Information and Communication Technology Authority (ZICTA) itself.

The final approvals for listing have not yet been granted by the regulators.

MTN is so far the only mobile phone operator in Zambia that has for years failed to comply with ZICTA's regulation that all foreign-owned telecom operators should have 10% of shares held by Zambians through the stock exchange.

ZICTA has threatened the operator with sanctions for being in breach of the regulation. This has forced MTN to take the steps to list on the stock exchange, however progress in this regard has been slow.

MTN is currently Zambia's largest mobile operator with 51.4% of the country's mobile market that has a total of 10.5 million subscribers.