Economy

Treasury rejects nominees for top capital markets job

njeru

Finance minister Njeru Githae. He says recruitment for the chief executive of CMA may have to be repeated after the agency is given a top parastatal status. Photo/FILE

Finance minister Njeru Githae has rejected the three candidates that were presented to him for appointment as chief executive of the Capital Markets Authority (CMA), setting the regulator on the path to staying without a substantive leader in the next few months.

Mr Githae said the three candidates, two women and one man, did not meet the Treasury’s requirements and suggested that the exercise may have to be repeated after the agency is upgraded to category ‘A’ status of State–owned firms.

“It will take some time to appoint the Capital Markets Authority (CMA) chief. The recruitment may have to be repeated because the calibre of applicants did not measure up to the task,” said Mr Githae.

He was speaking to journalists on Tuesday evening on the sidelines of a function at the Nairobi Serena Hotel to unveil a rebranded British American Investment Company.

Making CMA a category ‘A’ parastatal means the Treasury will finance it better, enabling it to pay workers competitive salaries that can attract quality private sector operatives.

“I want to upgrade the organisation to Category ‘A’ status in the same league as the Central Bank of Kenya and the Kenya Revenue Authority. The regulator’s category right now is very low and is the reason it is unable to attract qualified people and pay them accordingly,” said Mr Githae.

Changing the CMA’s status does not require any amendment of the law, but is merely “an administrative procedure,” he said.

CMA chairman Kung’u Gatabaki said the agency had followed the right procedure in recommending the candidates for appointment to the top job but agreed that it would have helped if more candidates applied -- giving the recruiters a wider choice.

“The issue is not whether the board was satisfied with the names it got from the recruiters or not. The right procedure was followed. It may very well be that we could have received more applications and better qualified people if we had a higher status as a parastatal,” said Mr Gatabaki.

Mr Gatabaki said elevation of the CMA to a higher status was long overdue and the minister needed to be commended for making the right decision.

“It is a good a thing because it means we will be better capitalised and lot of qualified people will find working for us attractive,” said Mr Gatabaki.

“We should be thinking of how we can attract good talent that does not come cheap. Paying the chief executive Sh1.5 million may still not be competitive enough because that is what some people in the second-tier management level are being paid in some of the organisations,” said Mr Gatabaki.

Mr Githae, who had promised to name the new CMA chief by the third week of August, has been on the spotlight after he failed twice to keep his promise. 

READ: Githae to pick new CMA chief executive next week

The CMA board is said to have presented to the minister three names for possible appointment to the position.

Those who made it to the final list included the head of investment banking arm of Standard Chartered Bank (Kenya) Wanjiku Mugane, CMA corporate affairs and communications director Rose Lumumba and Afrika Investment Bank chief executive Paul Mwai.

Ms Mugane was said to have scored top marks in the interviews followed by Ms Lumumba in a recruitment exercise that also attracted Central Depository and Settlement Corporation managing director Rose Mambo.

Ms Mugane joined Standard Chartered in 2009 from First Africa Capital – a firm she headed before it was sold to the bank.

The investment banking arm of StanChart has however been largely inactive outside of the deals that involve the commercial bank itself. Even at the time of its sale, First Africa had gone relatively quiet in the deal-making scene.

The CMA was left without a CEO at the end of June when Stella Kilonzo left “to pursue other interests” upon expiry of her term.

Paul Muthaura was appointed acting CEO but was not among those who applied for the position.

READ: CMA names Muthaura acting chief executive

Mr Muthaura has since last week embarked on the execution of a 100-day rapid-results initiative – the first at the authority – that aims to speed up payment of compensation to investors of collapsed stockbrokers and restoring confidence in the capital markets.

The CMA has also been recently thrust into the limelight by its position on recruitment of people into its board.

The recruitment a few weeks ago of one Priscilla Kirigua –  a close relative of a well-heeled corporate titan whose company is under investigation for its involvement in the scandal-ridden CMC Holdings – set Mr Githae on a war-path with Mr Gatabaki who opposed the appointment.

The candidate ultimately declined the offer.

Mr Gatabaki noted that the minister had powers to make appointments to the board and would soon be meeting to ratify the new replacement for Ms Kirigua – Judy Wamaitha Thuo.

“We know that somebody has been appointed. We have not yet ratified the decision. But we will meet to ratify it,” said Mr Gatabaki.

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