Ashok Shah quits CMC Motors board

Ashok Shah, the CEO of Apollo Investment, has become the fifth director of auto dealer CMC Holdings to retire, deepening the change in the composition of the company’s board that started two years ago.

CMC informed the capital markets regulator that Mr Shah had quit its board following in the footsteps of former chair of the company’s board Jeremiah Kiereini, former attorney- general Charles Njonjo, businessman Richard Kemoli and Andrew Hamilton.

“This is to inform you that Ashok Shah has voluntarily retired as a director of CMC Holdings,” the auto dealer said in a notice to the Capital Markets Authority.

Mr Shah’s exit leaves Paul Ndung’u as one of the longest serving directors of CMC, with all the other directors including chairman Joel Kibe having been appointed from 2011.

CMC appears keen on appointing more directors who don’t own a significant number of shares in the auto dealer.

The company’s board was previously dominated by its major owners, a fact that was blamed for breaches of corporate governance at the auto dealer.

The major owners, including Mr Njonjo, Mr Kiereini, Peter Muthoka, and Mr Shah, previously sat in CMC’s board and owned 62.9 per cent of the auto dealer.

The boardroom changes started with the resignation of Mr Kiereini in March 2011 when other major shareholders demanded the firm’s chairmanship.

Top shareholder Mr Muthoka and his business associate, Joseph Kivai, were voted out of the CMC board last year as the auto dealer’s boardroom wars intensified. Their eviction was followed by the resignation of Mr Njonjo in June 2012, Mr Hamilton (September 2012) and Mr Kemoli (November 2012).

The exit of Mr Muthoka and Mr Kiereini from the board saw the major shareholders appoint three new directors last week to represent their interests.

Mr Kiereini nominated former head of the National Social Security Fund Naftali Mogere, a move that was approved by shareholders at the AGM that was held after more than two years. The nomination of Kyalo Mbobu and Mark Karbolo, representing Mr Muthoka’s company Andy Forwarders, was also approved at the AGM.

The new directors join Mr Kibe, Mr Ndung’u, and three CMA appointees Ms Zehrabanu Janmohammed, Dr Joshua Okumbe, and Mrs Susan Wakhungu-Githuku in the company’s board that now has a much younger group of directors.

The retirement of Mr Shah comes at a time when CMC has become a takeover target by global vehicle distributors who are preparing to make a buyout offer to the Nairobi Securities Exchange-listed firm.

The buyout bid is expected to extend the suspension of the company’s shares from the Nairobi bourse.

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