Reprieve for ex-CMC directors as CMA reduces lifetime directorship ban

Two former CMC Holdings directors have had their lifetime ban on holding directorship positions reduced following a petition.

Billionaire businessman Peter Muthoka and Joseph Kivai will have their bans reduced to five years and will be eligible to sit on boards from August 2017.

The move by the Capital Markets Authority (CMA) follows a string of petitions filed by the duo challenging the action taken by the regulator. The CMA board had in 2012 issued a lifetime ban on seven CMC directors after revelations of fraud, lack of disclosure in published financial statements distributed to shareholders and conflicts of interest among board members.

Former CMA chairman Kung’u Gatabaki at the time said the seven could not be trusted with corporate leadership in any other company listed at the NSE.

In its review the capital markets regulator determined that the disqualifications relating to CMC Holdings had lapsed following the de-listing of the company and resolved to review the lifetime disqualification.

“In arriving at its decision, the CMA Board considered the grounds of the petition and submissions made, including the fact that neither petitioner had been involved in the maintenance of fraudulent offshore accounts drawn from shareholder funds,’ CMA said in a statement.

Dubai based conglomerate Al Futtaim bought CMC Holdings in 2014 for Sh7.5 billion and subsequently de-listed the firm from the Nairobi Securities Exchange.

Mr Muthoka was the biggest beneficiary of the buyout, earning Sh1.8 billion for his 24.7 percent stake in CMC.

Mr Muthoka gradually accumulated CMC shares from the early 2000s through his logistics firm Andy Forwarders.

Reporting by Beatrice Eghwa