Dividend cheques from the Nairobi Securities Exchange worth millions of shillings that were sent to the wrong recipients due to a mix-up in shareholders’ addresses have been cancelled.
The CDSC, which manages all stock accounts on an online platform, blamed the error on a technical hitch that supposedly caused a mix-up of the address lists resulting in sending dividend cheques to the wrong addresses.
In a paid advertisement, CDSC allayed fears of any loss saying they had cancelled all cheques that had been sent and was in the process of preparing new ones for issuance and dispatch to the right accounts. “We sincerely apologise to our client, the Nairobi Securities Exchange and all shareholders for this error,” the advert said.
CDSC says it is in the process of putting in adequate measures to ensure an immediate resolution of the dividend disbursements. The CDSC’s online platform was established to introduce a paperless and secure system of handling transactions at NSE with a view to enhancing transparency as activities can be traced from the sellers, dealers and eventual buyers who receive prompt massages from CDSC upon settlement of all dealings.
Fast-tracking trades and settlement
But recent incident raises fears of a major loophole at CDSC over its ability to safeguard client information that has now leaked to other people. CDSC is also tasked with keeping records of all shareholders at NSE and with its coming into effect share certificates were done away with in favour of an online based system that would help fast track trading and settlement of payments.
Since its inception, CDSC established and operated a central depository system for clearing, settlement and depository services for securities listed on the NSE. It was established by an Act of Parliament that empowered the Capital Markets Authority to establish and operate a system for the central handling of deliveries and settlement of securities in the Capital Markets in Kenya.
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