ECMA Warns Public Against Unregistered Share Sale Advertised on Social Media

Ethiopian Capital Market Authority Launches Investigation Into Gezana General Trading Share Company

The Ethiopian Capital Market Authority (ECMA) has issued a public warning against Gezana General Trading Share Company over the illegal promotion and sale of unregistered shares on social media platforms.

In a precautionary notice published on May 22, the Authority stated that the company has been advertising shares for sale, particularly on Facebook, without obtaining the mandatory regulatory approval required under Ethiopia’s capital market laws.

According to the advertisements, the company is offering shares at 2,500 birr per share while promoting a wide range of claimed business assets and investments. The promotions state that the company owns two schools, hospitals, credit and saving institution branches across multiple cities in Tigray, car sales warehouses, a Bajaj assembly workshop, and a media production company.

The company also allegedly promised investors a 15 percent net profit dividend for three consecutive years, alongside additional benefits including access to loans, training opportunities, and employment priority.

ECMA stated that the offering violates Article 4 of the Public Offering and Trading of Securities Directive No. 1030/2017, which prohibits the sale of unregistered securities. The Authority further noted that such activities may constitute a criminal offence under Article 106 of the Capital Market Proclamation No. 1248/2013.

In addition, the regulator said broadcasting securities advertisements without prior authorization from the Authority is prohibited under Article 53 of the same directive and may result in legal penalties.

The Authority confirmed that an administrative investigation into the company is currently underway.

ECMA strongly urged the public not to purchase the unregistered shares or make payments to the company or its agents until the matter is resolved. The regulator also called on the public to report suspicious or unauthorized investment solicitations.

The warning comes as Ethiopia continues efforts to establish a more regulated and transparent capital market environment following recent financial sector reforms and the development of the country’s emerging securities market.