The Capital Markets Authority has suspended East African Portland Cement Company (EAPCC) shares from trading at the Nairobi Securities Exchange (NSE) for 60 days.
The suspension follows an interim halt on trading that was imposed by the NSE on December 27, last year and is designed to give EAPCC time to address all the outstanding corporate governance issues and boardroom wrangles facing the firm.
While delivering the directive, CMA chairman Kung’u Gatabaki said their decision was informed by the protracted disputes that are now being played out in court but which do not augur well for the capital markets.
“We thought that the issues would be resolved within a short period but the prolonged dispute about the structure of the board; about the shareholder interests; about the employees… we have stepped in now to suspend the trading of the shares,” he said adding that the action would protect the shareholders interests, particularly those with a minority stake.
The cement firm has been in the news since December 22 last year when accusations and counter accusations stemming from the suspension of the board by acting Industrialisation Minister Amason Kingi were played out in public.
The board challenged the decision to fire them in court saying the minister, under whose docket the company falls, had no authority to hire or fire directors.
Since then, it is now emerging that the action to suspend the directors was done without the knowledge of the regulator which has a say in the running of the cement manufacturer because it is a listed company.