The Capital Markets Authority (CMA) is investigating the suitability of a Bamburi Cement #ticker:BAMB director who was last week charged with defrauding the National Bank of Kenya (NBK), putting to the test Kenya’s newly enacted corporate governance laws.
The markets regulator said it is reviewing the eligibility of Chris Kisire to serve on the publicly-listed cement maker’s board, after the accountant was arraigned on charges of swindling more than Sh77 million from NBK #ticker:NBK.
CMA declined to respond on specifics to avoid sub judice, but asserted its power to enforce integrity in a market buffeted by allegations of fraud which have put at risk billions of investor wealth.
“The authority will conduct independent investigations and the findings will inform the next course of action,” CMA told the Business Daily.
“Section 25A of the Capital Markets Act provides that the authority may impose such sanctions and penalties as provided for including breach of the Act, regulations, rules, notices, guidelines, and directions.”
The importance of the probe is underlined by the fact that Mr Kisire is the chair of Bamburi’s board audit committee, a key organ in any business.
CMA’s code of corporate governance rules took effect in March this year, and Mr Kisire’s integrity questions provide an acid test for the regulator.
The new rules require listed companies to adopt high levels of governance, with firms required to make disclosures on the integrity of board members and senior executives.
Board audit committee members have to be endorsed by shareholders, according to the rules. Bamburi, controlled 58.6 per cent by Swiss conglomerate LafargeHolcim, was yet to respond to our queries by the time of going to Press.
Last year Bamburi promised to review Mr Kisire’s tenure on the board, where he represents Joshua Kulei’s interest, after he featured on Uhuru Kenyatta’s infamous list of shame, which alluded to his stint at troubled Mumias Sugar Company.