The Capital Markets Authority (CMA) has responded to growing concerns among the public regarding investment contracts offered by "Capital Chicken (SMC) Limited."

In a statement, the CMA clarified that Capital Chicken (SMC) Limited is not authorised to offer investment contracts to the public, as stipulated by Section 90 (G) of the Capital Markets Authority Act (Cap 84), as amended.

The CMA's announcement comes amid a wave of unease surrounding the activities of Capital Chicken (SMC) Limited and its dealings with investors. The CMA's firm stance aims to protect investors from unauthorised and potentially risky investment schemes.

Contrary to some reports circulating, the CMA said it has not temporarily closed Capital Chicken Limited (SMC). Instead, it has taken a proactive approach by referring the matter to the Uganda Police Criminal Investigations Directorate for further examination and potential legal action.

“The CMA has not temporarily closed Capital Chicken Limited (SMC) as alleged. This matter is now being handled by the Uganda Police Criminal Investigations Directorate,” CMA said.

The CMA's statement serves as a reminder to potential investors to exercise caution and due diligence when considering investment opportunities. Before participating in any investment, individuals are encouraged to verify the regulatory status of the offering and seek professional advice as needed.

Signs of a potential investment scam

The Bank of Uganda and CMA have over the past issued a stern warning, highlighting key indicators and red flags to help investors identify and steer clear of potential scams.

In recent years, investment scams have become increasingly sophisticated, with fraudsters using enticing promises of high returns to lure individuals seeking investment opportunities.

The BOU has urged the public to be cautious of any investment that guarantees exceptionally high returns with minimal risk. As the old adage goes, "If it sounds too good to be true, then it likely is."

Investors are encouraged to conduct thorough due diligence before committing their hard-earned money to any investment opportunity. Verify the legitimacy of the investment and seek advice from trusted financial professionals if necessary.

Legitimate businesses are subject to market fluctuations, experiencing both profitable and challenging periods. Beware of schemes that promise unwavering returns, regardless of market conditions.

If the investment strategy or business activities are described as overly complex or shrouded in secrecy, exercise caution. Transparency and a clear understanding of the investment are paramount.

Scam operators often prioritise recruiting new investors to maintain returns for existing participants. This pyramid-like structure is unsustainable and eventually leads to financial collapse.

Both new and existing clients encountering obstacles when attempting to withdraw funds should be suspicious. Funds may have already been diverted to scheme operators or used to pay earlier investors.