NSE seeks powers to rein in rogue firms

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By Titus Mbithi
Nairobi Securities Exchange is seeking delegated powers to penalise public companies involved in corporate governance malpractices.
The NSE has proposed to be given full market-surveillance capacity as a self-regulatory organisation to scrutinise and take action before a listed company becomes insolvent.
“We are looking at a situation where we can be allowed to act on behalf of the Capital Markets Authority to enforce some of these regulations to address a number of non-compliance issues. This includes companies which do not submit audit reports (on time) or fail to meet conformity,” Geoffrey Odundo said on the sideline of the self-listed firm’s annual general meeting on Thursday. “We are still discussing the powers that we will get from the CMA.” The bourse, he said, has set up a regulatory offence division under the regulatory affairs department for this purpose.
Shareholders voiced concerns during the AGM over possible erosion of their investment values due to recent increased cases of listed companies facing insolvency, near-insolvency or negative working capital.
“We now have Atlas Development which has moved its business to Ethiopia. We continue to invest in companies which are getting into trouble every day, which put us at risk of losing our investments,” Christopher Kariru, a shareholder, said at the AGM. At least four listed companies last year faced financial distress concerns, raising questions over their continued trading at the bourse. They included loss-making Kenya Airways, sole-listed retailer Uchumi Supermarkets and the National Bank of Kenya.

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