NAIROBI, Tuesday, Jan. 17 2012 – The shares of East Africa Portland Cement Company, the cement make embroiled in a management standoff, have been stopped from trading at the Nairobi Securities Exchange.
The move by the Kenya’s Capital Market Authority (CMA), communicated officially by the NSE management this evening, imposes a 60-day trading ban on the already suspended shares of East African Portland Cement (EAPCC) to protect investors’ value from a dispute between its board and the government.
The Nairobi Securities Exchange (NSE) had halted trading in the company’s shares on Dec. 27 after the government, which owns 25 percent of the cement maker, dissolved the board, citing an improper tendering process for clinker. The High Court later ruled that the government had no powers to dissolve the board.
“I hereby confirm that today, the NSE has suspended trading in the shares of East African Portland Cement Company,” NSE chief executive Peter Mwangi said in a statement release just moments ago. “The suspension will be for a period of 60 trading days with effect from January 17 2012. This follows direction from CMA and is intended to protect the interests of investors.”
EAPCC is the second company listed on the Kenyan stock exchange to be suspended in less than six months over corporate governance and compliance issues. Car dealer CMC Holdings was suspended in September 2011 following fraud claims involving its former chairman that led to an explosive boardroom war.
“The authority has set down an initial suspension period of 60 days to allow EAPCC to address all outstanding concerns on compliance with the regulatory obligations imposed on listed companies,” CMA Chairman Kung’u Gatabaki was reported as saying by Business Daily, which is published by Nation Media Group.
“We want to restore confidence in the capital markets,” he said. Gatabaki said a forensic audit was still being conducted into CMC Holdings, which remains suspended from the exchange.