CMA explains why action was taken against broker

Mr Shamiah, however, argued that as a statutory manager he could not comment on the reconciliation calls, but said he would look at the extent to which the Safaricom IPO had affected Ngenye’s financial position.

Strategic investors

The three-decade-old Ngenye Kariuki and Company was placed under statutory management two weeks ago after being suspended from accessing the Nairobi Stock Exchange (NSE) trading floor for two months.

Last August, the CMA gave Ngenye Kariuki and Company a conditional renewal of its trading license on the understanding that Mr Kariuki was involved in discussions with strategic investors who were willing to buy out the business.

“As at the end of 2009 the firm was unable to confirm any of these negotiations had been successful,” said Mr Shamiah.

“Throughout this period the authority has continued to receive complaints from Ngenye Kariuki’s clients of the inability of the company to pay them as and when payment fell due.”

The nearly 90,000 investors are believed to have bought shares worth an estimated Sh2 billion through the brokerage which was one of the pioneer indigenous owned brokerage firms.