The Nairobi Securities Exchange.

The Capital Markets Authority (CMA) has flagged five listed companies for operating below the required capital and liquidity limits and ordered them to make periodic reports on remedial measures they are taking.

According to the CMA Annual Report 2017/18 released on Monday, East African Cables has been ordered to to provide monthly status updates on the implementation of its undertaking to remedy its working capital position within one year, pursuant to section 11(3)(i) of the Capital Markets Act.

This was after CMA found it in breach of the law due to noncompliance with listing obligations for
issuers of equity securities. The company was found to be operating with a negative working capital contrary to the Fifth Schedule of the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002.

Stanlib Kenya Ltd has also been sanctioned for non-compliance with minimum Liquid Capital Requirements from the month of December 2016 to May 2017 contrary to Regulations 30(4) of the Capital Markets (Licensing Requirements) (General) Regulations, 2002 Amended 2016. It is now required to provide the Authority with undertaking on actions to be taken to remedy the non-compliance.

TransCentury Ltd was found guilty of failing to maintain adequate working capital contrary to the First schedule of the Capital Markets (Securities) (Public Offers, Listing and Disclosure) Regulations, 2002. It was directed to to provide quarterly updates on progress made in improving the situation.

In addition to late publication of financial results for which it was fined, Car & General (Kenya) Ltd was found to be operating without an adequate working capital and was similarly directed to to provide quarterly updates on progress it is making.

East African Portland Cement Ltd was flagged for failing to submit shareholding category status report for August 2017 within the regulatory timelines contrary to Regulations 4(1) and 4(2) of the Capital Markets (Foreign Investors) Regulations,2002 amended 2015. It was directed to comply
with reporting obligations and regulatory timelines, pursuant to Section 11(3)(i) of the Capital Markets Act.

Cytonn Investments Management Ltd (Cytonn Investments) was also found to be conducting capital markets regulated business without a valid license contrary to section 23(1) of the Capital Markets Act and was directed to ensure it takes requisite steps to bring Cytonn entities into compliance with the capital markets regulatory framework within 30 days and not later than 18th September 2017 pursuant to section 11(3)(cc) of the Capital Markets Act.

CMA says Cytonn Investments complied with the directive and Cytonn Asset Managers Limited was licensed by the Authority as a Fund Manager. Other related entities are in the process of being finalised.

According to the report, CMA imposed Ksh 113,481,196.07 in financial penalties for contravention of the capital markets legal and regulatory framework by listed companies and individuals in the financial year 2017/18.

It says no contest settlements of Ksh 49,012,007/= were executed between the Authority and individuals who had contravened capital markets regime.

CMA also received additional settlement of Ksh 56,972,625 in the CMC Holdings administrative action matter. In 2016/17, CMA had received During the period the Authority recovered the sum of Ksh 131,077,000 from former directors of the Company as disgorgement of sums irregularly received from offshore accounts.

The company had been fined for running a scheme involving over invoicing on importation of vehicles into Kenya by CMC and operation of various off-shore bank accounts for purposes
of channeling the margins from the over-invoicing for the benefit of select former key officers of CMC Holdings, among them Peter Muthoka and Joseph Kivai, to the detriment of the Company and its shareholders.

In 2017/18, listed companies fined included Kenya Orchards,Shelter Afrique, Umeme Ltd, Cannon Asset Managers Ltd, Fusion Investments Management Ltd, Car & General (Kenya) Ltd and East African Portland Cement Plc.


The CMA also sanctioned and fined various individuals, among them, former top National Bank of Kenya managers, Munir Ahmed Sheikh (former Managing Director), Chris Kisire (former Chief Financial Officer), George Jaba (former Chief Credit Officer) and Solomon Alubala (former Head of Treasury) for various malpractices including misrepresenting the bank’s of financial statements for the period ended 30th June 2015 and 30th September 2015 and fraudulently mobilising deposits that were then deposited in identified accounts.

However, they have all challenged the hefty fines and disqualification from holding public office imposed on them at the Capital Markets Tribunal and High Court.




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