NAIROBI, Kenya, Mar 20 – As part of its ongoing demutualisation process, the Nairobi Securities Exchange has elected a new board of directors that will foresee the separation of private ownership from the management of the exchange.
NSE Chairman Eddy Njoroge said the board restructuring will allow for more autonomy in the company that is now limited by shares and subject to regulations under the Companies Act.
“There should be a little more independence in terms of how the Exchange works. It will not be controlled by the members. Before when it was a mutual club it was the members who used to decide,” he said.
The new board will now comprise six independent and non-executive directors, two trading participant directors and one Executive Director who will serve as the Chief Executive Officer (CEO).
NSE members would hold 80 percent in the demutualised Exchange, while the government and the Investor Compensation Fund would be allocated 10 percent each.
The 80 percent stake held by members, however, would be further reduced to 40 percent, which Njoroge said would be facilitated through a subsequent offer of shares in the Exchange by private placement or initial public offer.
“In total we will have 22 participating members. We have given four percent to each of the participating members. Once the regulations are done we could allocate up to four million shares – about eight percent – to government and to the investors protection fund,” he noted.
Stockbrokers Shah Munge and Francis Thuo have also been admitted as individual shareholders into the NSE, on certain conditions, which Njoroge was not willing to divulge just yet.
He added that as the demutualisation process continues the company plans to be listed on the NSE by 2014 to unlock more value for shareholders.
Now that the NSE is pursuing status of a self-regulatory organisation it will assume some responsibility from the Capital Markets Authority (CMA) in terms of compliance and regulations within the market.
Njoroge, who is also the KenGen Managing Director, will maintain his post as the NSE Chairman.
New board members will include Winnie Nyamute, an ICPAK Audit Quality Assurance Committee member, Farhana Hassanali, HassConsult Property Development Manager and Samuel Njuguna Kimani, Jamii Bora Bank CEO.
Uchumi CEO Jonathan Ciano, Hosea Kimutai Kili (Chief Executive and Managing Trustee of the Local Authorities Pension Trust) Bob Karina (Executive Director of Faida Investment Bank) and Geoffrey Odundo, Managing Director and CEO of Kingdom Securities Limited will make up the rest of the board.
The names of the elected board have been forwarded to the CMA for consideration and approval.