Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Kenya

Regulator slams 90-day break for CMC shares

NAIROBI, Kenya, Sep 27 – Kenya’s market regulator has suspended the trading of motor vehicle dealer CMC Holdings Ltd shares for a further 90 days to protect shareholder interests.

The extension of the suspension of the shares is meant to enable the Capital Markets Authority to carry out further investigations over fraud allegations as well as boardroom wrangles that have rocked the company over recent months.

The news of the extension comes after the expiry of an initial seven-day suspension issued by the CMA on September 16.

“The extended suspension period is expected to facilitate ongoing investigations by CMA of allegations relating to CMC Holdings’ conduct of its affairs within the mandate of CMA and to sustain investor confidence in the capital markets,” CMA Chief Executive Officer Stella Kilonzo said.

At the time of suspension the shares were trading at Sh12.90. Shareholders will not be able to sell or buy the car dealer’s shares during this period.

CMC Chief Executive Officer Bill Lay brought to the fore claims that an internal audit had uncovered evidence of clandestine off shore bank accounts in the Island of Jersey (United Kingdom) operated by two former directors for many years.

While investigations are still ongoing as to how much had been siphoned off shore, one account is said to have Sh240 million.

Prior to the matter being taken up by the CMA for further investigations, Lay had said that they were working on ways of having the money repatriated to the company to boost its business growth.

“Investigations are still going on to understand the extent of the illegal transactions with the aim of recovering the money that belongs to CMC shareholders,” Lay said on September 14.

The management team at CMC led by Lay is currently implementing a business transformation program that has been endorsed by the regulator as it seeks to boost its operational efficiency.

Advertisement. Scroll to continue reading.

Corporate governance issues have also rocked the automobile dealer. This was made clear when the board suspended Peter Muthoka as chairman for his involvement as Andy Freight Forwarders chairman and CEO.

The logistics company headed by Muthoka is also said to have been overcharging CMC for its services by between Sh1.5 billion and Sh2billion in the last five years.

CMA regulations require that the board of a public company be chaired by a non-executive and independent director who is defined, among other criteria, as not having had any business relationship with the company other than service as a director.

Muthoka was subsequently replaced by Joe Kibe as chairman of CMC Holdings.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...