Companies

Jamii Bora Bank chief executive steps down from Uchumi board

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Jamii Bora Bank chief executive Samuel Kimani. PHOTO | FILE

The chief executive of Jamii Bora Bank, Samuel Kimani, has stepped down from his directorship at Uchumi in a bid to avoid conflict of interest due to his other board membership at the Nairobi Securities Exchange.

The Nairobi bourse is transforming into a self-regulating organisation, giving it powers to among other things set and enforce some market regulations, approve some listings and set market fees.

“This is to cure a conflict of interest presented by his membership of the Nairobi Securities Exchange Limited. The NSE is set to become a self-regulation organisation (SRO),” Uchumi said in a statement.

Jamii Bora Bank is the single-biggest shareholder of Uchumi controlling 15.8 per cent shareholding of the retailer followed by the government which controls 14.6 per cent stake.

The troubled retailer in a regulatory filing said Mr Kimani will be replaced by the Tier III bank’s Chief Operating Officer, Mr Tim Kabiru.

“To fill the vacancy, the board has appointed Tim Kabiru as a director which appointment is subject to confirmation by the shareholders at the next annual general meeting,” the notice read.

Mr Kimani quit the Uchumi board on Monday following plans by NSE to roll out self-regulations.

Uchumi said being a listed entity on the NSE presents a conflict of interest to the outgoing director.

Mr Kimani has been serving as an independent non-executive director of the NSE since 2013 along Ms Sharon Maviala, Hosea K Kili, Winnie Nyamute, Nasim Devji and Michael Turner.

READ: NSE looks to self-regulation rules for high efficiency

Jamii Bora’s stake in Uchumi is set to be diluted by nearly 60 per cent after suppliers of the retail chain agreed to convert Sh1.8 billion debt into equity in an out-of-court settlement.

The debt is part of an estimated Sh3.6 billion owed to suppliers. The company has been struggling under the weight of debt that has sunk it into a negative net asset position.

As a self-regulating organisation, the NSE will have powers to create and enforce industry regulations and standards with the core objective of protecting investors through rules that promote ethics and equality.

This function is currently largely undertaken by the Capital Markets Authority (CMA).

CMA which had earlier opposed allowing NSE to set its own fees over fears that the power could be abused took an about turn and endorsed NSEs plan to be given the authority to set its own fees when the exchange concluded its restructuring separating its ownership from management.

The bourse says that the move will enhance efficiency as Kenya seeks to position itself as the market of choice for issuers and investors eyeing East and Central Africa.