New CMA chairman steps in with focus on market reforms
Posted Thursday, June 16 2011 at 00:00
The newly-appointed chairman of the Capital Markets Authority (CMA), Mr Kung’u Gatabaki, plans to steer market reforms as he steps into his new role in the regulatory body.
Mr Gatabaki said his priority would be to add urgency to the process of re-structuring stockbrokers’ ownership and management of the Nairobi Stock Exchange (NSE), which is behind schedule.
“I realise the important role of the capital markets in accelerating capital-raising to finance investment. I will work closely with fellow CMA board members to ensure we steer the authority to deliver on this important development agenda,” said Mr Gatabaki.
He said he was delighted by the opportunity to serve the country at a time when the capital markets are playing a pivotal role towards the achievement of Vision 2030 by mobilising resources to support productive economic activities.
The process of diluting stockbroker’s influence on management of the NSE, commonly known as demutualisation, appears to have slowed down after running into resistance from the intermediaries who are demanding that CMA should recognise the value of their shareholding at the stock exchange, estimated at Sh251 million each, as part of their balance sheet assets.
The brokers have said that they will not hold a special general meeting to approve the demutualisation unless CMA agrees to their demands. But CMA has stood its ground and does not appear ready to negotiate the matter. This has caused a standoff delaying the conclusion of the process from its initial date of April this year, even though parliament allowed it to go on in the Finance Act 2010/11.
Willie Njoroge, CEO of the Kenya Association of Stockbrokers and Investment Banks, said the industry welcomed the new appointment noting that Mr Gatabaki “has a proven track record in stewardship of companies.”“We have absolute confidence in him and we know he will steer the organisation to greater heights,” said Mr Njoroge.
Mr Gatabaki said his short-term focus would be to ensure the momentum of the reform agenda in the capital markets in order to bolster investor confidence and market integrity.
In a statement, CMA said that Mr Gatabaki brought a wealth of experience to the organisation, having served for 39 years on several boards of private sector companies, and worked as a country executive at Actis Capital for several decades.
“He has wide experience in project finance, portfolio management, and corporate board practices in key sectors of the economy including agriculture, hospitality, and housing,” the statement said.
Mr Gatabaki joined CDC Group Plc – formerly Commonwealth Development Corporation – in 1974 where he worked until 2004. He was involved in the promotion of the CDC corporate image and its transformation into Actis.
The statement said he had also been involved in corporate restructuring and sovereign debt management assignments in various institutions such as Shelter Afrique and helped in the redemption of Department for International Development debts to the Kenya Government with regard to sugar outgrower schemes and Nairobi City Council housing and water supply projects.
Mr Gatabaki was retained as a consultant for portfolio investments for Actis Africa from 2004 to 2008.