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Kenya's first Attorney General Charles Njonjo died on January 2, 2022. /COURTESY.


CMA bans Njonjo, Muthoka from listed firms

NAIROBI, Kenya, Aug 3 -The Capital Markets Authority (CMA) has banned Charles Njonjo, Peter Muthoka, Jeremiah Kiereini and four others from sitting on any Board of a listed company for breaching the capital market’s legal and regulatory requirements in CMC Holdings Limited.


Others are Martin Forster, Sobakchand Shah, Richard Kemoli and Andrew Hamilton.


CMA Board Chairman Kungu Gatabaki said that Joseph Kivai has also been disqualified, but with respect to his directorship at CMC Holdings Limited only.


He said the action was taken pursuant to findings of investigations by Webber Wentzel and the CMA team.


Gatabaki stated that the move was delayed due to countless court cases filed mainly by Peter Muthoka, who questioned the powers of the Authority to appoint an interim board, and also a contempt application by Andy Forwarders Limited against CMA for interfering with the composition of the Board.

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He further said the Board had announced a raft of long-term reform measures for implementation in the capital markets in Kenya.


CMA will now require all directors of listed companies to produce evidence of attendance to recommended corporate governance workshops, as a prerequisite qualification to nomination as director of a listed entity.


Moreover, all directors of listed companies must undertake training in corporate governance every three years, with compliance of this fact reported in the annual report.


They have also prescribed an age limit of 75 years for a person to serve as director of a listed company.


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“We will be scrutinizing the special resolutions that allow boards to continue engaging directors over 72 years, which is the provision for the Companies Act. Until then, after 75 we will not entertain directors being appointed on boards of listed companies,” he said.


CMA will also require all listed companies to comply with the gender appointment requirements under the Constitution, and in the Capital Markets Legal Framework.


The CMA recommended that the two directors alleged to have siphoned funds from CMC into offshore accounts repay up to double the amount.


“That money earned interest if you counted all the money they had stuck out there. We would like to see that money returned to CMC two or three times,” Gatabaki said.


He added that the regulator would want to scrutinize Muthoka’s dealings with CMC more closely.

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“If we found there was fraud involved we would result in freezing Muthoka’s shares,” Gatabaki warned.


An excerpt from the report by Justice Aaron Ringera, who chaired the Ad Hoc Committee of the CMA Board reviewing investigations, described former CMC Group Managing Director Martin Forster as having a larger than life profile in the company.


“His word was law. He called the shots. He was more powerful than the company’s Board of Directors. That was not because the law or the articles of association gave him such power or because of his powering intellect, but because the directors of CMCH, who were beneficiaries of the healthy trade failed to question his management decisions,” he observed.


Gatabaki said the regulator would want to resume trading of CMC’s share as soon as possible. However he said the company still has to fulfill some compliance requirements.


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CMC shares were suspended from trading on the Nairobi Securities Exchange on June 4, 2012, with the last trading prices standing at Sh13.50.



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