CMA freezes Amana Capital over liquidity constraints

February 13, 2020 (1 week ago)
In a statement, the Authority says the move, which is in line with its investor protection mandate, will give the firm time to realize strategies to improve its liquidity position to meet redemptions/FILE

, NAIROBI, Kenya, Feb 13 – The Capital Markets Authority has issued a 28-day freeze on Nairobi-based fund manager Amana Capital to enable the firm to boost its liquidity.

In a statement, the Authority says the move, which is in line with its investor protection mandate, will give the firm time to realize strategies to improve its liquidity position to meet redemptions.

The move therefore means that unit holders will be unable to access their funds during the suspension period.

However, the firm has convened a meeting with its investors, as required under the Trust Deed and Rules of the Amana Unit Trusts.

“The Authority has been engaging the Board and Management of Amana Capital, the Trustee and the Custodian as they put together solutions to the liquidity challenges,” read the Authority’s statement.

Amana Capital was thrown into the spotlight earlier this month for stopping its clients from withdrawing funds, totaling to Sh275 million.

The fund’s woes are tied with the collapse of Nakumatt Holdings, where it had invested up to 20 percent of its assets.

Ordinarily, fund managers only seek the approval of their trustees before investing and only disclose publicly the broad investment classes rather that the specific instruments such as commercial papers and company stocks that they have taken a position.

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